RE:RE:Some Thoughts on ENB and Its FutureInteresting analysis, Thanks Marner!
The turbulence around L5 will definitelly affects market perception and sentiment. It may look rosey if you look Marner's numbers, however for the time being all that is certain is the negative media attention and increased legal costs on L5. Plus I have no idea what the law says and what tools MI governor has at their disposition to seize $$$ from ENB, and what the extent of these penalties would be. I don't know either if these penalties will be reversed when all these are put behind us and L5 is done and over with. This is national / international news and it won't go unnoticed, I do expect it to zig zag for a while and present trade opportunities. Lots of investors will choose to stay away only because of the drama.
With or without L5, ENB is still a champ. This is not a 5k run though, it's a marathon and L5 drama is the extra weight you don't want nor need to compete at the highest level. ENB management I am sure hired the brightest legal minds to help them overcome MI obstacles, but so did MI. Plus we all know that when it comes to pipelines the goal is to delay no matter the costs, maybe just maybe something will happen. Any delay is considered a victory.
Marner16 wrote: Fantome: I thought I would add a little detail on your last statement about expected growth in capital gains and dividend. I know that any type of analysis or creative thought are treated with disdain on this board by the readers who have the attention span of a gnat, but here goes:
Expected dividend in:
2022 - $3.57....the full 7% at the top of the growth in DCF range as it was held to 3% this year
2023 - $3.78....6% growth which is the midpoint of the growth in the DCF range
2024 - $4.01....6% growth....this will be announced in early December 2023 at Enbridge Day
I expect we will see the dividend higher each year than stated above but lets be conservative.
Historically, before 2015, the average yield for ENB was about 3%. With mgmt's stated objective of sticking to its desire to be an ultra conservative company, and their strong track record of meeting or beating their guidance, I think it would be very unlikely that the yield for ENB won't return to 5% or below in the next 2 1/2 years. As a side note, ENB's yield was just above 5% before the pandemic hit. A 5% yield would suggest a share price target of 20x the dividend. An expected $4 dividend being announced in 31 months from now translates to a share price target of $80 per share.
When the market gets around to recognizing that ENB is an ESG leader that is moving away from oil towards renewables and service contracts, and has incredible cash flow to support its GHG initiatives, perhaps we will see the yield drop significantly lower than 5%.
I know....way too much information for some.