Author Topic: ENB - Enbridge  (Read 15049 times)

sarganaga

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Re: ENB - Enbridge
« Reply #70 on: December 11, 2018, 12:58:30 PM »
ENB raised their dividend by 10% for 2019. Other info http://www.enbridge.com/~/media/Enb/Documents/Investor%20Relations/2018/ENBDay/ENBDay2018_COMBINEDPRESENTATION.pdf from their 2018 ANNUAL INVESTOR DAY


JRM

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Re: ENB - Enbridge
« Reply #71 on: December 11, 2018, 02:39:11 PM »
shares outstanding up 14.3% and total debt up 23% annualized over the past 5 years.  not a fan of the mlp growth model.

Spekulatius

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Re: ENB - Enbridge
« Reply #72 on: December 11, 2018, 03:19:37 PM »
shares outstanding up 14.3% and total debt up 23% annualized over the past 5 years.  not a fan of the mlp growth model.

The better metric would be to look at distributable cash flow /share, which has been increasing. however, Generaly, I agree with you that the MLP business model is broken, it had been broken since the end of 2015, when the energy market collapsed due to low crude prices and a credit crunch developed in this sector. Since then however, the pipeline cos have been deleveraging and ENB is no exception.

FWIW, the debt and sharedoint is up in large part due the merger with Spectra energy and the huge investment program, it will go up again, because the remaining MLP units Iíll be exchanged for shares, so there is no MLP model any more for ENB. ENB in the future will issue far less equity , be less leveraged and will retain a significant amount of cash flow to reinvest in new projects. Itís a great holding in an IRA, where the dividend is tax free.
To be a realist, one has to believe in miracles.

rb

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Re: ENB - Enbridge
« Reply #73 on: December 11, 2018, 08:14:10 PM »
If memory serves me correctly, ENB has been systematically issuing shares in order to fund dividends. It's one of the reasons I'm not too hot on the company.

The system works better if you issue overvalued shares to pay for fair market dividends. But it sucks when you issue undervalued shares to pay for fair market dividends. It never ends well though.

sarganaga

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Re: ENB - Enbridge
« Reply #74 on: December 12, 2018, 03:22:16 AM »
If memory serves me correctly, ENB has been systematically issuing shares in order to fund dividends. It's one of the reasons I'm not too hot on the company.

The system works better if you issue overvalued shares to pay for fair market dividends. But it sucks when you issue undervalued shares to pay for fair market dividends. It never ends well though.

On page 10 of their annual investor day notes http://www.enbridge.com/~/media/Enb/Documents/Investor%20Relations/2018/ENBDay/ENBDay2018_COMBINEDPRESENTATION.pdf, they claim that they will be self funding going forward & will not need to issue any further equity. This was a key point in pulling the trigger on this. I was never a fan of their serial issuance of shares. We'll see. 2 1/2% position for me.

frommi

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Re: ENB - Enbridge
« Reply #75 on: December 12, 2018, 04:27:05 AM »
On page 10 of their annual investor day notes http://www.enbridge.com/~/media/Enb/Documents/Investor%20Relations/2018/ENBDay/ENBDay2018_COMBINEDPRESENTATION.pdf, they claim that they will be self funding going forward & will not need to issue any further equity. This was a key point in pulling the trigger on this. I was never a fan of their serial issuance of shares. We'll see. 2 1/2% position for me.

They even took action on this and stopped the drip program, that was the key for me to make this a larger position. The whole midstream sector looks like a good bet right now, i have ~25% of my portfolio now in this sector. (KMI, ENB, TRP, MMP and D)

peterHK

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Re: ENB - Enbridge
« Reply #76 on: December 12, 2018, 07:28:29 AM »
If memory serves me correctly, ENB has been systematically issuing shares in order to fund dividends. It's one of the reasons I'm not too hot on the company.

The system works better if you issue overvalued shares to pay for fair market dividends. But it sucks when you issue undervalued shares to pay for fair market dividends. It never ends well though.

That's the wrong way to look at it. Just because the cash outflow of CFO - capex - dividend = share issuance doesn't mean they're funding the dividend with shares. It can also mean that they're funding capex with shares.

They were issuing shares to fund their capex program. If you issue shares at a 7% ke and that funds investment into assets with a 15% ROE then that is a good use of shares as it is accretive to the value of the company. Might it have been better to not pay a dividend and reinvest their own internal cash flows? Tough to say because you'd likely be issuing them at a lower multiple as the yield folks will reward the stock if you pay a dividend.




no_free_lunch

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Re: ENB - Enbridge
« Reply #77 on: Today at 12:44:14 PM »
Anyone looked at IPL.to (inter-pipeline)?  Pipeline company with operations in Alberta.  Has an excellent track record  of growing distributions (according to their IR site).   Actually has lower debt levels than enbridge by most metrics.   Also a higher yield at 8.5%.   Haven't really done the work on it but hoping someone can give an opinion.