Analysis:
* ENS is trading at almost a 7% discount to the NAV when it has historically traded at a substantial premium to the NAV
* I keep track of what I call the RAISE number. It is a number that has to meet of exceed the UNIT NAV. I calculate the RAISE number by multiplying a discount to the MARKET price of the UNIT. Currently, the UNIT NAV exceeds my RAISE number by $1.94. As cttglvr pointed out (without the benefit of a RAISE calculation) that number is almost gm$2. That means ENB would have to fall a ton from the current price without ENS following it down in order for Middlefield to do a RAISE. Remember that when ENB falls a dollar, ENS should fall $0.44 so the math gets silly. Bottom line is that ENS is remarkably safe at the moment and I'm only talking about a RAISE. ENB would have to drop to $32 and stay there for awhile for ENS shareholders to not receive the monthly divi
Gut:
* The analyst concensus for ENB has been around $53 for some time. I haven't checked it lately. My target has been $55 based on....well.....BS mostly which is what I call gut feel. I haven't done a proper spread sheet analysis in 20 years. My gut has been telling me for some time that the analyst numbers are jaded by the fact that the world is slowly and then not-so-slowly move away from hydrocarbons. I don't think the analysts give ENB mgmt enough credit for the work they have done over the past 8 years. Mgmt has always been rock solid, but the company has changed from being a 100% iquid mover pre-Spectra to now only being a 50% liquid mover in a very short period of time (short considering the massive size of the company). When I look at a company like Suncor which has doubled down on liquids and sold off its renewable portfolio, there is simply no comparison.
* ENB's natgas distributor business in Ontario has been a fantastic business. The business is fully regulated and backed by the local government. The business has all kinds of incremental-add potential with NO opposition. That means LONG term security. Compare that to the political and social insanity of ENB trying to add refit its Mainline liquid pipe assets. ENB is about to add the last (and smallest and third) natgas acquistion from Dominion. The deal was for Cdn $19 billion as has now been fully funded. All three companies acquired have very friendly natgas political bases with laws already in place to support future growth. The deal will double ENB's natgas distribution presence. When Greg Ebel first talked about the deal as "generational", I chalked it up to normal PR hype. As I dug into the details a bit, I realized that ENB has basically duplicated what it has done in Ontario but with more diversification, a better political climate, and more growth potential. I don't think the market has priced this in. It will take time, but eventually, the street will see the numbers and wake up. This isn't a surprise as the analysts deal in "what is" rather than "what ifs".
I traded ENB a bit around a core position for a few years and then walked away when the company announced that they anticipated their growth to drop down to the 5% to 7% range after being in double digits for several years. When I saw what ENB was doing with the natgas export port in Louisianna and the pipelines to the Permian, I decided to get back in. This time, I got back in via ENS as the monthly 13% cash flow is almost double what ENB pays with way less than double the risk IMO. When ENB announced the Dominion acquistion in Sept 2023 and the share price of ENB as well as ENS tanked, I moved into ENS for a full position.and have been patiently collecting the monthly divi ever since.
I have no clue what the ENB or the ENS share price are going to be next week or next year. What I think I know is that ENB mgmt is among the best in the entire market and that they have just lassoed another whale with the Dominion acquisition. It won't be exciting but the cash will roll in every month and the market will eventually realize the value which should increase the total return with a higer share price. All of this with virtually zero drama as I don't see ENB being subject to the sunset industry scenario that companies like SU face.
Who knows, but ya gotta invest in something or watch your stack get eaten up by the house.