RE:Some Thoughts on ENB and Its FutureSo much political risk on this back water player one tiny leak in line 5 and it's over. quote=Fantome]1.....Line 3 is almost complete and is highly unlikely at this stage to be cancelled. The new pipe will have twice the capacity of the old pipe it is replacing (about 350K B/day). This increased volume will generate additional revenue for ENB once completed
2....Line 5 will not be shut down and the tunnel project will go ahead...albeit with some cost increases...some of which have already been announced in the latest Q report. In terms of shutting the pipleine down....Whitmer is just posturing....the case is in Federal Court which has a majority of Republican judges and the courts above it are also stacked with republican judges...should a decision be appealed...Biden will not interfere with the court cases and further...while he will show support in words for Whitmer and the other environmental zealots...he cannot afford to lose seats in Michigan...Indiana and Ohio as he surely would if he shut it down....bottom line...Line 5 tunnel will be built...but with some delays
3.....ENB has massive cashflow...they have already signalled exactly what they are going to do with the money over the next couple of years....all of their plans are low risk....have low regulatory hurdles and the bottom line contribution to ENB cashflow are well known...
4....ENB is a leader in ESG....they consume a lot of energy to run their pipeline...about a billion dollars a year....they already have projects in their project list which will reduce these costs going forward using solar...and other renewables...including hydrogen and biomass
5....the environmental folks have already assured investors that there will be little chance that any future major pipeline projects will get approved in the US....what this means is that those companies which already have pipeline systems in place will see the value of these pipleines increase in value as time goes on for at least another 20-30 years
6....to borrow from Marner...the dividend yield for ENB for the last year or so has been at historical high levels....about twice the historical average....as things settle down....ie Line 3 is operational and the tunnel for Line 5 starts being built....there will be a reversion to the mean WRT the dividend yield and the yield will drift back towards its historical averages.....when you combine this with the ENB managment forecast of 5-7% dividend increases....the math gives you a SP north of 80 a share
Bottom Line?
Patient investors in ENB will see significant capital gains and dividend income over the next 3-10 years[/quote]