ENB
Enbridge Inc
Energy
12/11/2017
Presented
| Date | 12/06/2017 |
| Price | $38.14 |
| Market Cap | $62.63B |
| Ent Value | $135.01B |
| P/E Ratio | 25.57x |
| Book Value | $24.31 |
| Div Yield | 6.4% |
| Shares O/S | 1,642.00M |
| Ave Daily Vol | 2,595,126 |
| Short Int | 0.07% |
Current
| Price | $41.29 |
| Market Cap | $89.91B |
| Enbridge, Inc. engages in the provision of gas and oil businesses. It operates through the following segments: Liquid Pipelines, Gas Distribution, Gas Pipelines & Processing, Green Power & Transmission and Energy Services. The Liquids Pipelines segment consists of common carrier and contract crude oil, natural gas liquids and refined products pipelines and terminals in Canada and U.S., including Canadian Mainline, Regional Oil Sands System, Southern Lights Pipeline, Spearhead Pipeline, Seaway Crude Pipeline interest and other feeder pipelines. The Gas Distribution segment consists of the company's natural gas utility operations which serve residential, commercial and industrial customers, primarily in central and eastern Ontario as well as northern New York State. The Gas Pipelines and Processing segment consists of investments in natural gas pipelines, processing and green energy projects, the company's commodity marketing businesses and international activities. The Green Power and Transmission segment consists of the company's investments in renewable energy assets and transmission facilities. The Energy Services segment consists of businesses in Canada and the United States undertake physical commodity marketing activity and logistical services, oversee refinery supply services and manage the company's volume commitments on various pipeline systems. Enbridge was founded on April 30, 1949 and is headquartered in Calgary, Canada. |
Publicly traded companies mentioned herein: Enbridge Inc (ENB; ENB CN)
Highlights
The presenter is long shares of Enbridge (ENB; ENB CN) in the high $30s (high 40s, CAD), and sees a favorable risk/ reward heading into 2018. The Canadian midstream company’s stock has sold off “too much given the demand drivers in place”. A portion of the declines would appear to be related to the poor performance of the peer group, but management’s previous communication issues and the delays seen with the Line 3 infrastructure replacement project have contributed to the low double-digit decline over the last year. However, ENB’s issues are now “baked-in” to the point where he believes: 1) guidance and expectations for 2018 are beatable; 2) any positive news related to the Line 3 project moving forward on schedule could drive shares higher by $4-5, all else equal; and 3) shares are relatively cheap looking out to 2019 (10x expected FCF and 11x expected EBITDA). If ENB can continue to trade at forward multiples of 11x FCF and 13x EBITDA, the stock could see 60 CAD in two years, for a 20% gain (plus the 5.5% yield).
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