Enbridge – An Introduction
This Canadian company is a pipeline company involved in the following areas:
- Liquid Pipelines – carrier of crude oil, natural gas liquids, and other refined pipeline products through terminals in Canada and the United States.
- Gas Distribution – serves residential, commercial and industrial customers in central and easter Ontario, northern New York State and other markets such as Quebec.
- Gas Pipelines, Processing, and Energy Services – With various interests in other pipelines, such as the Alliance Pipeline and Vector Pipeline (which are gathering pipelines in the Gulf of Mexico), Enbridge is in all the right places.
Enbridge – Where Stock and Dividend Intersect
There is so much more that could be said about Enbridge, but let’s get to what really matters for investors. The reality is if you’re looking for a great stock with a reliable dividend, than Enbridge rises to the top of the list. Here’s a few reason’s why:
- Large and Diverse – Enbridge has the world’s longest crude oil and pipeline system, with the ability to gather, store, transmit, etc. products to critical markets across Canada and the US. Big shale plays relay on them, as do large crude oil producers.
- Solid Fundamentals – The most recent numbers confirmed their success and growth as they forecasted better than expected guidance for 2012, far beyond the analysts expectations. Remember, expectations are even more important than earnings… and they backed it up with a 15% boost to their dividend (a sign of commitment to their philosophy of paying out 60-70% of earnings).
- Dividend Direction – Not only did they boost their dividend, but did you know that not once in their 55+ years as a publicly traded company has Enbridge cut the dividend? In fact, the annual increase has been 11%… so it is predictable, reliable, and you can trust their forecasts.
- Future Business – With over 48 Billion worth of projects in the next 10 years already accounted for, this company is poised for continued growth. Couple that with the continual political instability in the Middle East and other parts of the world and this company is in the right place to prosper. Enbridge ties in the 2nd biggest oil reserve in the world (the Alberta Oilsands) with one of the largest markets (the land-locked US Midwest – i.e. Chicago). Furthermore, they have the ability to export their precious commodities to Asia… and are growing this business opportunity. This will only support the ability for the company to increase its dividend in future years too.
Enbridge in my Portfolio
Some wonder if they can maintain their business in light of the “green” movement and their carbon footprint. Well, when you compare it to the carbon footprint of coal, it is lower, yet coal accounts for 50% of the US power supply. If you compare it to the carbon footprint of heavy oil production in California, you discover there’s no measurable difference. As technologies continue to develop and the green initiative continues to find a voice, Enbridge is positioned well to partner for a healthier tomorrow.
Enbridge is a quality company… an in a growing sector. In fact, I’ll be adding this company to my list of Best Canadian Stocks when I expand my list from 5 to 10. As investors end 2011 and begin 2012 in search of the best and most reliable stocks with solid fundamentals that pay the highest dividends, they’ll like what they find with this growth oriented pipeline stock, Enbridge.