Published Wed, 17 Oct 2018 08:30:10 -0400 on Seeking Alpha
Thesis Enbridge's (ENB) low valuation and solid growth outlook, coupled with a high current dividend yield, should allow for substantial total returns over the coming years.
Growth projects and the simplification of Enbridge's corporate structure will allow for ample earnings and cash flow growth, and for ongoing dividend increases that will vastly outpace the rate of inflation.
These factors make this low-risk infrastructure company look like a compelling investment for income-focused investors as well as for those seeking total returns.
Enbridge's corporate simplification and its impact on Enbridge's results The North American pipeline giant Enbridge has taken a majority stake in Spectra Energy (SEP) during the oil price crash, but Spectra Energy has so far not been taken out completely. This summer the two companies agreed on a takeover of the remainder of Spectra Energy's units by Enbridge, though, in a deal that values the stake at $3.3 billion. Both companies believe that the takeover will be closed during the fourth quarter of 2018, i.e. during the next couple of weeks.
This takeover will not impact Enbridge's consolidated cash flows or profits, as Spectra Energy's assets are already consolidated into Enbridge's results.
Source: Acquisition announcement
The takeover of the remainder of Spectra's units will nevertheless be advantageous for Enbridge, due to a couple of reasons. First, Enbridge's distributions... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|ENBRIDGE ENERGY MANAGEMENT||10.51||0.0||0.00||0.00||13.65|
|ENBRIDGE ENERGY PARTNERS LP||10.79||21.6||0.50||1.40||13.35|
|SPECTRA ENERGY PARTNERS LP||35.40||0.0||0.00||0.00||0.00|
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