Investing

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

  • Last Updated:
  • Oct 17th, 2020 7:45 pm
Deal Addict
Dec 3, 2014
1874 posts
1051 upvotes
Ontario
DealRNothing wrote: I have found ENB one of the easier stocks to pick bottoms (or close to) to build a position. I started in late 2015 and have never bought / added above $35 CAD which has worked out from a Capital appreciation & income POV.

The catalyst for my interest was the Spectra acquisition announcement and then I patiently waited as the stock absorbed the selling pressure on the acquisition metrics, additional roll-ups (ENF, etc).

My last add was on the March sell-off at $33.95 CAD
I am not sure if I am misreading the ENB chart, but I am having some difficulty understanding how you were building a position below $35/share starting in late 2015 since the chart I am looking at shows the stock traded down to a $40-$45 range in late 2015. It was possible to obtain ENB for less than $35 in peak panic of March, but it was only in that range for two trading days. Prior to March 2020, ENB had not dipped below $35 since late 2011.

Looking back to 2015, ENB has had pretty strong support at the downside at about $40/share. However, it has traded very poorly since March 2020 with questionable future prospects in light of the growing popularity of anti-pipelines politics.

I am currently out of the stock, but previously held it for several years. I personally think pipelines are essential, but I find my opinions on a lot of things increasingly unpopular with the masses and I am ultimately investing for returns only.
Member
Jul 30, 2012
416 posts
404 upvotes
llpresident wrote: I am not sure if I am misreading the ENB chart, but I am having some difficulty understanding how you were building a position below $35/share starting in late 2015 since the chart I am looking at shows the stock traded down to a $40-$45 range in late 2015. It was possible to obtain ENB for less than $35 in peak panic of March, but it was only in that range for two trading days. Prior to March 2020, ENB had not dipped below $35 since late 2011.

Looking back to 2015, ENB has had pretty strong support at the downside at about $40/share. However, it has traded very poorly since March 2020 with questionable future prospects in light of the growing popularity of anti-pipelines politics.

I am currently out of the stock, but previously held it for several years. I personally think pipelines are essential, but I find my opinions on a lot of things increasingly unpopular with the masses and I am ultimately investing for returns only.
A number of periods actually but I never was able to buy at the absolute bottoms. Because of investor sentiment and reduced valuation modeling I do, I do not have the stock as a $50+ estimate in my portfolio. If one is seeking that type of capital appreciation (beyond $46>$50), ENB is not likely the right horse (in the near term).

ENB (CAD) Chart
Deal Addict
Dec 3, 2014
1874 posts
1051 upvotes
Ontario
DealRNothing wrote: A number of periods actually but I never was able to buy at the absolute bottoms. Because of investor sentiment and reduced valuation modeling I do, I do not have the stock as a $50+ estimate in my portfolio. If one is seeking that type of capital appreciation (beyond $46>$50), ENB is not likely the right horse.

ENB (CAD) Chart
Well that looks legit enough, but for whatever reason when I pull up a max chart of ENB on Questrade or Google, I am not seeing much in the way of drops below $40 other than briefly March 2020 and then back to 2011. I am not sure why Questrade or Google do not have a 10 year chart option.
Deal Addict
Feb 26, 2017
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I'm looking at enb as a way to bring my yield higher/increase my dividend income. I may sell my RRSP shares if it gets back to 51 or 52 again. Most of my shares are in my unregistered account which focused on paying myself with high yield stocks (its also my worst performing account this year :) ). I view the ENB dividend as very safe but after holding for nearly 4 years I don't have very high expectations for the stock price.
Member
Jul 30, 2012
416 posts
404 upvotes
Chance7652 wrote: I'm looking at enb as a way to bring my yield higher/increase my dividend income. I may sell my RRSP shares if it gets back to 51 or 52 again. Most of my shares are in my unregistered account which focused on paying myself with high yield stocks (its also my worst performing account this year :) ). I view the ENB dividend as very safe but after holding for nearly 4 years I don't have very high expectations for the stock price.
Much depends on what one thinks an acceptable annualized yield "can and should" be going forward. The S&P500 annualized (60 years) performance is 8% (equivalent to ENB's current Dividend yield, Winking Face). If one doesn't think ENB stock value is sustainable over the longer term, then look for exit points.

Most investors have been lulled into thinking stocks only go up and at a 15%+ annual growth rate (aka US Tech / Top S&P stocks). Look beyond 10 year historical charts and you might view stocks like ENB differently, Winking Face
Last edited by DealRNothing on Sep 18th, 2020 5:32 pm, edited 1 time in total.
Deal Addict
Dec 3, 2014
1874 posts
1051 upvotes
Ontario
llpresident wrote: Well that looks legit enough, but for whatever reason when I pull up a max chart of ENB on Questrade or Google, I am not seeing much in the way of drops below $40 other than briefly March 2020 and then back to 2011. I am not sure why Questrade or Google do not have a 10 year chart option.
I've pulled up an ENB.TO chart with a variety of other sources and they are all consistent with what I was seeing on Google and Questrade; namely, that ENB has not dropped below about $37 dating back to 2012, other than two trading days in March 2020. Anyone who has been investing in ENB back to 2012 have a comment on this?
Deal Addict
Feb 26, 2017
1620 posts
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DealRNothing wrote: Much depends on what one thinks an acceptable annualized yield "can and should" be going forward. The S&P500 annualized (60 years) performance is 8% (equivalent to ENB's current Dividend yield, Winking Face). If one doesn't think ENB stock value is sustainable over the longer term, then look for exit points.

Most investors have been lulled into thinking stocks only go up and at a 15%+ annual growth rate (aka US Tech / Top S&P stocks). Look beyond 10 year historical charts and you might view stocks like ENB differently, Winking Face
For total returns I've overall done poorly on ENB as I started buying at 56 and have an overall cost of 47 (I'm likely up slightly with the dividends).

The key thing is its doing what I want it to do which is provide a high income that is growing. ENB is part of my Canadian portfolio focused on dividend growth and its been very good for that for that. There is no sense in me speculating on the future stock price as in all honesty I'm not very good at that.

If I find a stock that is growing 15-20% a year I'll try to increase the amount I own of it if I can find a reasonable price to buy more. Most stocks are not going to be like that though. Some will underperform and I'll continue to hold them as long as they keep the thesis that I bought them for (generally dividend growth).
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Oct 14, 2015
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llpresident wrote: I've pulled up an ENB.TO chart with a variety of other sources and they are all consistent with what I was seeing on Google and Questrade; namely, that ENB has not dropped below about $37 dating back to 2012, other than two trading days in March 2020. Anyone who has been investing in ENB back to 2012 have a comment on this?
That's true for charting services which do not adjust prices for dividends.

ENB unadjusted.png

The default setting for StockCharts adjusts prices for dividends,
so the price dips below $37 more often.

ENB adjusted.png

Here's another view:
price adjusted for dividends - red
price unadjusted - blue

ENB .png
Newbie
Aug 15, 2016
48 posts
46 upvotes
ENB is a great company and I don't see any reason they won't continue to grow the dividend. That said, the performance over the last 6 months has been underwhelming and I see some potential risk ahead on a couple key projects. November will be a key month for ENB, both for the US federal election and an update on Line 3 replacement. If Biden gets elected, Keystone XL will almost certainly get cancelled. This is a TC Energy project but if it goes ahead under Trump, there could be a scenario where there is too much committed pipeline capacity out of Alberta and the ENB mainline will be underutilized.
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Mar 10, 2005
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Brewmaster7 wrote: ENB is a great company and I don't see any reason they won't continue to grow the dividend. That said, the performance over the last 6 months has been underwhelming and I see some potential risk ahead on a couple key projects. November will be a key month for ENB, both for the US federal election and an update on Line 3 replacement. If Biden gets elected, Keystone XL will almost certainly get cancelled. This is a TC Energy project but if it goes ahead under Trump, there could be a scenario where there is too much committed pipeline capacity out of Alberta and the ENB mainline will be underutilized.
Biden recently said he's still for Fracking....short term at least so maybe he doesn't cancel Keystone XL
Discomfort is your friend
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Oct 12, 2009
419 posts
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I enjoy the dividend of Enbridge. I sold some for some Tesla long term but long term DRIP is a win win for me. Hoping it drops around $37 then pump some more in
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Deal Addict
Feb 26, 2017
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I found this interesting so I'm going to post it. Below is a excerpt from a TD Analyst report on IPL and mentions that they got a 10 EBITDA multiple on the sale of their storage assets.

I view these storage assets as lower quality than the pipelines that ENB owns. ENB is currently trading at around a 10 EV/EBITDA and below is a link to an article that argues its worth closer to a 12 EBITDA based on historical multiples. I agree with the thesis of the article and think its a well written summary of why ENB is undervalued. Going to give a heads up that the comments section is a bit of a cesspool as the author has an tendency to agues with people about politics...

https://seekingalpha.com/article/437515 ... as-project
Event
Inter Pipeline Ltd. (IPL) announced that it has entered into an agreement for the sale
of a majority of its European bulk liquid storage business for proceeds of £420mm
($715mm).
Impact: SLIGHTLY POSITIVE
■ Sale Details: We calculate the transaction multiple at ~10x 2019 EBITDA. The
sale includes 15 storage terminals and ~18mmbbls of storage capacity in the
U.K., Ireland, Netherlands, and Germany. Proceeds from the sale will focus on the
Canadian business including reducing debt, strengthening the balance sheet, and
financing the capex program (including the Heartland Petrochemical Complex).
Deal Fanatic
Feb 4, 2015
5919 posts
2421 upvotes
Canada, Eh!!
Put in bids today to add to Enbridge and Pembina.

I'll check tomorrow if get else rebid :)
.......
July 13, 2017 to October 25, 2018: BOC raised rates 5 times and MCAP raised its prime rate next day each time.

2020: BOC dropped rates 3 times and MCAP waited and waited to drop its prime rate to include all 3 drops.
Deal Fanatic
May 22, 2003
5041 posts
2276 upvotes
Vancouver
llpresident wrote: I've pulled up an ENB.TO chart with a variety of other sources and they are all consistent with what I was seeing on Google and Questrade; namely, that ENB has not dropped below about $37 dating back to 2012, other than two trading days in March 2020. Anyone who has been investing in ENB back to 2012 have a comment on this?
My records show I managed to buy some ENB at just below $40 on Dec 24, 2018. I also got lucky and bought some on March 23,2020 at $34.25. I find anything below $40 is a good entry point with ENB
Member
Mar 25, 2013
241 posts
31 upvotes
Any concern with their high amount of debt at about $60B?
Pay-out ratio not so great either...

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