UpdateI have been busy.
Middlefield found a way to do a Raise while the Premium to the NAV was only 17%. That caught me a bit off guard as I don't know how they were able to cover the costs without smacking the NAV. I will reach out to IR to find out how they did it. I like to sell before a Raise and buy back for a 4% to 5% win.
I bought 11,000 on the dip this morning which raises my cost per share for the position but it still yields 13.2%. If the share price hangs around this level for a bit, I will try to add to get to the position.
If memory serves, ENS has been running at a cash flow shortfall of $0.80 per year. ENB announced that they are raising their divi by $0.11 per year. One ENS share equates to 0.44 ENB shares, which means the annual cash flow shortfall for each ENS share should be about $0.75 per year going forward.
If ENB can successfully close the 3 Dominion gas distribution deals in 2024 as anticipated and get the necessary downsizing and unforseen costs out of the way, I'm hoping that the deals will allow ENB to increase its dividend a year from now by perhaps 4%. \If that happens, the ENB 2025 divi would be $3.80 which would be a $0.16 increase. That in turn would reduce the ENS annual cash shortfall by another $0.07.
It is going to take a few years, but eventually, I expect that ENS will be cash flow neutral based upon paying out a $0.13 monthly dividend. At that point, there is no cash flow risk to owning ENS.
The share price will still move up and down more than the ENB share price due to the leverage associated with ENS, but in terms of actual cash, no worries!
What does that mean?
Unless there is a catastrophic and prolonged crash in the ENB share price which caused the NAV of ENS Unit to drop and stay below $15.00 the ENS dividend will just keep on keeping on. :)