Author Topic: ENB - Enbridge  (Read 14014 times)

Spekulatius

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Re: ENB - Enbridge
« Reply #40 on: September 09, 2018, 07:00:52 AM »
Does ENB issue a K1?  Can anyone explain this to me in simplistic terms?

ENB is a C-Corp and does not issue a K-1. Neither does EEQ. EEP and SEP are MLPs and do issue K-1’s. Tax wise, ENB is treated like any other Canadian stock. For US shareholders, there is a 15% withholding tax in a taxable account, but nothing in an IRA account. That’s why I like holding it in IRA’s.
« Last Edit: September 09, 2018, 01:38:47 PM by Spekulatius »
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ValueMaven

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Re: ENB - Enbridge
« Reply #41 on: September 09, 2018, 08:20:12 AM »
Very interesting.  Thank you! 


Spekulatius

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Re: ENB - Enbridge
« Reply #43 on: September 26, 2018, 11:26:27 AM »
I also think that ENB is very cheap here , with a 6% dividend, growing by 10% and a derisked balance sheet ( due to asset sales).
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alpha

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Re: ENB - Enbridge
« Reply #44 on: October 09, 2018, 08:45:01 PM »

LC

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Re: ENB - Enbridge
« Reply #45 on: October 09, 2018, 10:16:37 PM »
I also think that ENB is very cheap here , with a 6% dividend, growing by 10% and a derisked balance sheet ( due to asset sales).
Thanks for your comments on this one. Has been on my watch list for a while but had nothing liquid, that is changing. Cheers.
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Uccmal

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Re: ENB - Enbridge
« Reply #46 on: October 10, 2018, 05:18:23 AM »
I also think that ENB is very cheap here , with a 6% dividend, growing by 10% and a derisked balance sheet ( due to asset sales).
Thanks for your comments on this one. Has been on my watch list for a while but had nothing liquid, that is changing. Cheers.

Still my largest holding (If I count the Brookfield holdings as a group then ENB is #2).  I have seen a couple of writeups on seeking alpha that try to get at the proforma earnings after the consolidation.  As far as I can tell they will likely be able to meet their payout and buildout obligations out of cash flow for some time.  I cant think of a safer moat in the present economy than an existing pipeline system in North America. 
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frommi

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Re: ENB - Enbridge
« Reply #47 on: October 10, 2018, 06:22:36 AM »
I like KMI a lot more because the leverage is so much lower. When you factor in minorities and preferred shares for ENB it has leverage of 6.4 x EBITDA and the stock trades at 12xEV/EBITDA.
KMI trades at 10.4xEV/EBITDA with a leverage of 4.9 x EBITDA (2019: 9.7 EV/EBITDA, 4.6xEBITDA). But i don`t have a clue how much ENB will make in EBITDA next year, it looks like there comes a lot of growth online next year. Has anyone EBITDA estimates for 2019?

Uccmal

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Re: ENB - Enbridge
« Reply #48 on: October 11, 2018, 06:44:13 AM »
I like KMI a lot more because the leverage is so much lower. When you factor in minorities and preferred shares for ENB it has leverage of 6.4 x EBITDA and the stock trades at 12xEV/EBITDA.
KMI trades at 10.4xEV/EBITDA with a leverage of 4.9 x EBITDA (2019: 9.7 EV/EBITDA, 4.6xEBITDA). But i don`t have a clue how much ENB will make in EBITDA next year, it looks like there comes a lot of growth online next year. Has anyone EBITDA estimates for 2019?

To your last line.  I generally dont attempt that sort of thing.  Enbridge bit off alot when they bought Spectra.  The high leverage and possible interest rate increases is leaning heavy on the stock.

I had Enbridge as a holding for quite a while but only made it a really big holding when the stock went below 40 CDN.  My buy in is around 43 average - CDN. 

Here is what I see:
1) A huge company with a lock on big parts of the movement of NA Energy.  It seems that building pipe is getting harder, not easier.  And there is really no other option.  Try working out how many railcars you need to make much difference to transport volumes.  The same would apply to KMI of course. 
2) Pays a dividend north of 6% right now and has promised to increase it by 10% per year for the next two years.  Now they haven't raised it yet and I have seen companies reverse course so....
3) Is buying in its subs.  By doing this they can right size the payouts from the MLPs leaving more at the parentco to pay to shareholders via debt reduction, continued dividend increase and further pipe building. 
4) Have a large backlog of permitted pipe projects from the acqusition of Spectra. 

The bogeyman seems to be interest rates and debt load.  I think this is a bit of an overreaction.  Enbridge was issuing extreme long term bonds right up until now at some pretty low rates.  Then there is the dividend payout versus interest rates.  The assumption is that rates will continue to be lifted.  This may be true but at the first sign of a recession they will come right back down. 

So, in short.  Who knows?  Meanwhile I get paid alot to wait.
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Spekulatius

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Re: ENB - Enbridge
« Reply #49 on: October 11, 2018, 03:55:36 PM »
I like KMI a lot more because the leverage is so much lower. When you factor in minorities and preferred shares for ENB it has leverage of 6.4 x EBITDA and the stock trades at 12xEV/EBITDA.
KMI trades at 10.4xEV/EBITDA with a leverage of 4.9 x EBITDA (2019: 9.7 EV/EBITDA, 4.6xEBITDA). But i don`t have a clue how much ENB will make in EBITDA next year, it looks like there comes a lot of growth online next year. Has anyone EBITDA estimates for 2019?

I think your numbers are a bit off. I do not believe that ENB leverage is 6.4x EBITDA. n their investor presentation is is noted as being 5x, which does not include the preferred , which I think are roughly $7B CAD, so they would make around 5.6x all inclusive. Also note they ENB recently sold assets for 7B CAD. I think the picture gets clearer once the assets sales and the retructuring of the MLP subs is complete. Right now, at current prices  ENB DCF is around 4.35 CAD/ share, which translates into a 10%+ cash yield. ENB is also on track to increase  their DCF by 20% YoY.

KMI has a bit lower leverage, but I think their assets overall are of somewhat lower quality. For example about 15% of KMI cash flows are from the CO2 segment, which is an E&P in disguise and really deserves a 5x multiple only.

I own both KMI and ENB, but own more ENB. At current valuations, I prefer ENB over KMI. In fact, I added a few shares today.
To be a realist, one has to believe in miracles.