Investing

Is Enbridge Inc (ENB) stock a good time to buy now?

  • Last Updated:
  • Oct 24th, 2020 5:44 am
Deal Fanatic
Feb 9, 2009
9338 posts
6952 upvotes
Yeah I got funds ready to go. 6.8% yield looks thirsty!
Deal Addict
User avatar
Aug 10, 2006
1494 posts
796 upvotes
this is my only stock i have no concerns about these past few weeks. just thinking now will oil price wars impact this stock?
Deal Addict
User avatar
Oct 5, 2003
3808 posts
187 upvotes
wakka2u wrote: this is my only stock i have no concerns about these past few weeks. just thinking now will oil price wars impact this stock?
Hopefully someone smart knows. If this is down 20% tomorrow do I buy?
Deal Fanatic
Feb 9, 2009
9338 posts
6952 upvotes
Justin wrote: Hopefully someone smart knows. If this is down 20% tomorrow do I buy?
If ENB is down 20% tomorrow load up the truck!
Deal Fanatic
Jul 7, 2004
5825 posts
1493 upvotes
Sanyo wrote: If ENB is down 20% tomorrow load up the truck!
Might be stupid question, but no chance they go bankrupt?
Banned
Jun 15, 2012
2837 posts
1004 upvotes
Saskatoon
baz5 wrote: Might be stupid question, but no chance they go bankrupt?
Nah, government is always there. Too big to fail, rule.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
Deal Addict
Feb 26, 2017
1628 posts
1664 upvotes
baz5 wrote: Might be stupid question, but no chance they go bankrupt?
I don't see it. 98% of ENB revenue is fixed fee take or pay contracts. Their biggest revenue generator is the Canadian mainline which is 3/4 of Canada's exit capacity. Canada's current issue is that it doesn't have enough exit pipeline capacity.

The second slide is the relevant one.

Image
Deal Addict
Nov 23, 2008
4319 posts
1256 upvotes
wakka2u wrote: this is my only stock i have no concerns about these past few weeks. just thinking now will oil price wars impact this stock?
i think you have an answer today...
Deal Fanatic
Feb 9, 2009
9338 posts
6952 upvotes
The danger if oil falls too low will the oil company be able to hold up their promise to send the crude they contracted with ENB.. for now not a big deal its too early in the game, could be an issue eventually for CDN oil sands or US shale.
Banned
Jun 15, 2012
2837 posts
1004 upvotes
Saskatoon
Chance7652 wrote: Here is a pretty negative article on pipelines. Basically the thesis is that pipelines are over reporting their dividend coverage by underestimating their maintenance capital. I don't agree with the conclusion but it will be interesting to see how higher yields affect some of the pipelines abilities to fund their growth.

https://seekingalpha.com/article/433098 ... 1583869560

I'm still trying to figure out if I should put more money into the sector. I'm planning on watching some basketball and reading some pipeline investor presentations tonight :).
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
Newbie
Oct 20, 2018
30 posts
7 upvotes
Sanyo wrote: The danger if oil falls too low will the oil company be able to hold up their promise to send the crude they contracted with ENB.. for now not a big deal its too early in the game, could be an issue eventually for CDN oil sands or US shale.
I've thought about this, too. Makes a bit nervous buying pipelines.
Banned
Jun 15, 2012
2837 posts
1004 upvotes
Saskatoon
Chance7652 wrote: Question or comment on that post?
I was gonna get some ENB into my TFSA, but after reading that article, I will have to steer away from it.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul
Deal Addict
Feb 26, 2017
1628 posts
1664 upvotes
ukrainiandude wrote: I was gonna get some ENB into my TFSA, but after reading that article, I will have to steer away from it.
I think its an interesting article the lays out a bear case for pipelines. I try to look at both sides when I invest in something. For the article I don't think railroads are a great comparison and some of the commentators pointed out issues with the authors methodology. Pipelines do last a long time as shown by how TMX was built in 1951. It can be an issue with a metric like DCF where it can be manipulated to make results look better (I don't think ENB is doing this).

If you look at what ENB is actually doing I think things look better. Debt is down from over a 6x Debt to EBITA to 4.5x and their debt was upgraded. They're also moving to a self funding model that doesn't involve issuing equity. Its a good sign the treasury drip was cancelled last year. Its going to be a lower growth company but a 7% yield at 5% growth looks like a good investment to me.
Banned
Jun 15, 2012
2837 posts
1004 upvotes
Saskatoon
Chance7652 wrote: I think its an interesting article the lays out a bear case for pipelines. I try to look at both sides when I invest in something. For the article I don't think railroads are a great comparison and some of the commentators pointed out issues with the authors methodology. Pipelines do last a long time as shown by how TMX was built in 1951. It can be an issue with a metric like DCF where it can be manipulated to make results look better (I don't think ENB is doing this).

If you look at what ENB is actually doing I think things look better. Debt is down from over a 6x Debt to EBITA to 4.5x and their debt was upgraded. They're also moving to a self funding model that doesn't involve issuing equity. Its a good sign the treasury drip was cancelled last year. Its going to be a lower growth company but a 7% yield at 5% growth looks like a good investment to me.
Market value is 90 ;total debt is 65
if you look at some other dividends plays with comparable market value
RIO
Market 84 and debt is significantly lower at 14

The only hope that ENB is to big to fail, and government will step in bail it out.

===
Now I am also looking at attractive dividend plays in financial. CM, BNS, LB , great prices, wonderful dividend rates. But , all got significant exposure to oil sector.
No need to type thank you; upvote=thanks.
Buffett, investors are focusing “not on what an asset will produce but rather on what the next fellow will pay for it.”

“Because gold is honest money it is disliked by dishonest men.” – R. Paul

Top

Thread Information

There is currently 1 user viewing this thread. (1 member and 0 guests)

sshe11