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Enbridge: An Attractive Long-Term Buy

Christopher C. Liu, Portfolio Manager

August 31, 2018

Enbridge (ENB) is a Canadian energy generation, distribution, and transportation business operating in the US and Canada. Among its numerous oil and gas infrastructure assets, the company boasts the Canadian Mainline pipeline system representing approximately 70% of Canada’s pipeline takeaway capacity. We believe that Enbridge is poised to benefit from growing oil sands supply in the coming years as it works through a $22 billion backlog of pipeline construction projects. Highlighted by last year’s acquisition of Spectra Energy as well as the Line 3 pipeline replacement, which recently received regulatory approval to finish construction, we foresee cash flows meaningfully ramping up in the near term. Shares yield nearly 6% as of the time of this writing; after the announcement of a 15% dividend increase declared in February, and with the firm targeting 10% annual dividend raises through the next three years, we believe Enbridge stock currently represents an attractive opportunity for long-term investors.


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