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Old 01-23-2019, 01:07 PM   #1
SublettingProblems
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Enbridge (ENB)

Putting this here for review/critique.

Enbridge (ENB) is an energy pipeline company in Calgary, Alberta. I think it's an attractive investment because it pays good dividends which should also be sustainable.

ENB currently pays a dividend of 6.21%, which is less than 65% of their distributable cashflow. Last month they announced a 10% dividend increase through 2019-2020.

Their business model limits exposure to fluctuation in commodity prices because their income is fee-based and subject to long-term contracts. Although significant capital expenditures are planned, none would appear to require issuance of additional stock or other forms of indebtedness.

I believe the future of fossil fuels is with natural gas. Natural gas is found both in abundance in both the Permian Basin and Bakken formation, and has the advantage of being both inexpensive and clean-burning. Because it's cheap, oil companies have chosen to flare it off at the well site because it's not profitable to build the infrastructure to capture and transport it - however that is quickly changing.

Natural gas must be cooled into liquid form before it can be shipped. Cheniere Energy (LNG) is building port facilities in Texas for that purpose to meet demands for some European countries. Natural gas prices have risen in the past year and Enbridge pipelines currently handle the majority of natural gas in North America, and pipelines by their nature have a large moat, so I think it should be a good long-term investment.
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Old 01-26-2019, 12:27 PM   #2
eastern motors
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Re: Enbridge (ENB)

They have some pretty big downside risk in Michigan. They operate "line 5" which goes from the Upper Peninsula to the Lower Penisula. It's very old and past expected service life. The public is against it continuinig to operate. Recent huge spill in Michigan on another enbridge pipeline and "line 5" mostly caries hydrocarbons to/from Canada, just takes shortcut through Michigan. Ds took over Governor and Attorney General from Rs in November and want to shut it down. Rs did some last minute legislation to keep it open but clearly going to be challenged in court.
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Old 01-27-2019, 12:13 AM   #3
theviolator
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Re: Enbridge (ENB)

I've owned ENB for 15 years and am not selling simply due to the large tax impact I would face. I would not touch any CAnadian based O&G company with a ten foot pole. Trudeau and his ilk are just barely above Castro and Maduro on economic policy. We literally have a $10Billion project (LNG Canada) goign nowhere due to a few natives saying they do not give consent and that the construction is on their traplines. Gov't does nothing as usual.
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Old 01-27-2019, 09:12 PM   #4
piepounder
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Re: Enbridge (ENB)

id just buy Fortis get 4.5% but a lot more solid biz

In general I dont think people realize how much an impact the USA allowing expensing of capital will have. ITs barely talked about but its murderous. hmm lets think...where do i want ot invest money...somewhere that lets be depreciate or somewhere that lets me write it off year one....pretty damn obvious which is less risky investment.

long run of USA dominance is coming until others realize the impact of capital expensing
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Old 01-28-2019, 08:57 AM   #5
Timogen
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Re: Enbridge (ENB)

Quote:
Originally Posted by theviolator View Post
I've owned ENB for 15 years and am not selling simply due to the large tax impact I would face. I would not touch any CAnadian based O&G company with a ten foot pole. Trudeau and his ilk are just barely above Castro and Maduro on economic policy. We literally have a $10Billion project (LNG Canada) goign nowhere due to a few natives saying they do not give consent and that the construction is on their traplines. Gov't does nothing as usual.
+1. I have been slowing moving out of ENB after owning for 8 years. I got rid of my TRP first and now it is time for ENB to go. I prefer and have been buying FTS (as mentioned above) or the American DUK as a replacement.


The special snowflakes in charge up north have no idea how much trouble the Canadian economy really is in, especially in the long term.
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Old 01-29-2019, 12:36 AM   #6
theviolator
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Re: Enbridge (ENB)

Other thing I wanted to mention is that many of the sovereign funds out there want nothing to do with Oil. They even mention it in their Investor mandates. Hell even the Canada Pension Plan has made statements to that affect about sustainability blah blah blah
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Old 01-31-2019, 04:20 PM   #7
coordi
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Re: Enbridge (ENB)

https://www.thestar.com/calgary/2019...creditors.html

Is this going to change the energy landscape in Canada? I could see it shaking things up a bit.
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Old 02-02-2019, 09:04 AM   #8
ahnuld
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Re: Enbridge (ENB)

ENB's biggest asset is the mainline pipe system. Its all oil. yes enb acquired spectra but its still an oil pipe company
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Old 02-02-2019, 09:05 AM   #9
ahnuld
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Re: Enbridge (ENB)

Quote:
Originally Posted by coordi View Post
https://www.thestar.com/calgary/2019...creditors.html

Is this going to change the energy landscape in Canada? I could see it shaking things up a bit.
no, this is just common sense. ****ty small cap producers with tons of old wells will be hit by this. the majors are all oil sands anyways and this doesnt affect them.

there is a bill being considered now about the review process that could have a big impact on pipelines because it is poorly crafted
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