Post by
TickerTwit on Jun 18, 2018 3:53pm
Conversion Arithmetic
(1) One ENF share gets you a dividend of 2.2596 per year.
(2) One ENB share gets you a dividend of 2.6840 per year.
(3) On conversion your dividend becomes 0.7029*2.6840 = 1.8866 per year (83.5% of what you got from ENF).
(4) The loss in annual dividend is 2.2596-1.8866 = 0.3730, which at this moment is less than 1% of ENB's share price.
Even a small year-over-year capital gain, as little as 1%, gets you more than the loss in dividend. Most Canadians get a further gain due to the difference in tax rates (capital gain vs dividend).
When the dropdown halt becomes obvious, ENF might not see capital gains ever again once delinked from the conversion ratio.
Comment by
freedomfiddy on Jun 18, 2018 6:12pm
This post has been removed in accordance with Community Policy
Comment by
Sadie222 on Jun 19, 2018 3:03pm
All well and good, but that’s assuming ENF can’t grow without dropdowns, something I’m not prepared to accept at this point, and assuming ENB will grow in a reasonable timeframe. I’ll probably let what I have left roll over, but the option to change horses is still there. I’m still annoyed by the cherry-picked date, but they need something to kick-start the review process.