Random Note On Enbridge -- January 13, 2017

I've always been fascinated by Enbridge. I first became aware of Enbridge during the early days of the Bakken boom. Enbridge had a relatively small operation south of Williston but it was impressive, and it seemed to be among the first big players in the Bakken. Since then, that operation (as "measured" by the footprint) has steadily grown. So, it's been interesting to watch Enbridge in the Bakken. 

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on anything you read here or think you may have read here. With regard to Enbridge, I've owned a small amount of shares over the years but have no plans to buy any more shares in Enbridge. 

From Motley Fool, from a couple of days ago:

Last fall, Canadian pipeline giant Enbridge announced that it would increase its dividend 10% for 2018. That pushes the company's dividend-growth streak to an impressive 23 years, which is just two shy of the years necessary to become a Dividend Aristocrat.

Enbridge fully expects to lay claim to that title in 2020 since it also plans to increase its payout 10% in 2019 and 2020. Those future increases will push Enbridge's already impressive 4.7%-yielding dividend even higher.

Fueling Enbridge's fast-growing dividend are 22 billion Canadian dollars ($17.5 billion) of high-return expansion projects currently underway. The company expects recently completed expansions and those coming on line this year to increase its available cash flow from operations by about 15% in 2018.

That puts the pipeline giant on pace to grow cash flow by at least a 10% compound annual rate per share through 2020, providing it with the fuel to keep raising the dividend.

From an earlier post, December 27, 2017:

Enbridge: growth portfolio is underappreciated -- Morningstar.

Enbridge is positioned to benefit from growing oil sands supply dynamics with its Mainline system and regional oil sands pipelines. The regulated Mainline system generates attractive tolls and represents approximately 70% of Canada’s pipeline takeaway capacity. The system offers refinery access to various markets, adding to the network’s attractiveness.

While crude pipelines are Enbridge’s bread and butter, the company operates a diverse energy portfolio. Gas distribution operations benefit from regulated returns and provide the company with reliable cash flows. Enbridge also operates natural gas pipelines and processing assets that supplement its crude pipeline network. Future natural gas pipeline projects benefit from long-term contracts that are tied into emerging projects.

Recently, Enbridge finalized its acquisition of Spectra Energy. The deal positions Enbridge to diversify its operations toward natural gas. The company intends to increase its annual dividend and has maintained an average distributable cash coverage ratio of approximately 3 times over the past three years.

Overall, Enbridge is in a strong position to benefit from the growing oil sands supply, which we expect to outstrip pipeline takeaway capacity in the near term. We expect the Line 3 Replacement to help; we project it to be in service by the end of 2019 and fuel tremendous growth for the company. We believe the stock is undervalued based on the company’s vast growth portfolio, highlighted by the lucrative natural gas projects associated with the Spectra acquisition and the Line 3 Replacement.

Enbridge Energy Partners: 10% dividend just got safer -- Motley Fool.

Not only that, but management expects the payout to grow at around 3% per year through 2020. Investors were rightly shocked by the news, sending shares up by as much as 10%. Enbridge Energy Partners and its parent, Enbridge, Inc. (NYSE: ENB), have made multiple moves in recent years that would leave anyone's head spinning. But the ship seems to have been righted, and the stock's sky-high yield appears safe for the foreseeable future in light of the outlook's key details. In fact, for venturesome investors, EEP is a great high-yield stock to consider heading into the new year. 

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on anything you read here or think you may have read here.