Since midstream operations have lower exposure to volatility in commodity prices, the outlook for the Zacks Oil and Gas - Production & Pipelines industry is bullish. Enbridge (ENB), Williams Companies (WMB), Kinder Morgan (KMI) and MPLX are the frontrunners in the industry.
In the latest trading session, Enbridge (ENB) closed at $35.38, marking a -0.65% move from the previous day.
Assuming a 3% annual dividend growth, would Enbridge's common shares have a higher perceived value than the company's preferreds over the next 5 years? Enbridge common shares yield 7.52% after the June price drop, close to the yield of (ENB.PR.N:CA) preferred shares after reset. Enbridge fundamentals are strong, but Wall Street is less bullish. I downgrade common shares to Hold, as preferreds offer better value.
Energy Transfer and Enbridge's pipelines transfer oil and gas throughout North America. Both companies feature juicy dividend yields backed by solid financials.
Enbridge is one of the highest-yielding energy stocks. It also has one of the longest dividend increase streaks in the energy sector.
In June, I aggressively bought three of my top high yield blue-chip ideas, tripling my share count in some of these companies. With an average yield of 7%, growing 10% per year, being 19% undervalued, and having 32% upside potential in the next year, BTI, ENB, and BAM offer incredible short-and long-term opportunities. Enbridge's Line 5 concerns are way overblown, and its yield is at historical extremes that generate 13% long-term total return guidance from management.
With a significant portion of its assets being contracted by shippers for the long term, Enbridge's (ENB) business model is less exposed to volatility in oil and gas prices.
Enbridge is working with Indigenous partners to secure a new wind farm project in Canada. It would add to the company's already robust growth project backlog.
This collaboration represents the first instance of Enbridge (ENB) partnering with Indigenous communities on a wind farm project.
The energy sector had an underwhelming month of June. The ongoing market rally, driven by the excitement surrounding artificial intelligence, has propelled tech stocks to new heights.
Enbridge has struggled to gain momentum in the market, but its growing dividend has been a saving grace for shareholders. The company's infrastructure is critical to big-tech companies and is positioned to benefit from the growing demand for sustainable energy. Enbridge is undervalued and offers a strong income opportunity for investors, with plans for future growth in earnings, dividends, and EBITDA.
Enbridge is an attractive stock due to its 7.73% dividend yield. I present a more contrarian view in this article. The company has built an established presence and long-term drivers remain intact. In the long term, the business might perform well. However, I believe the stock is accurately priced due to concerns regarding asset growth, debt financing, and the sustainability of the dividend.