Spectra Energy Corporation (SE): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

By Zacks Investment Research,

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Spectra Energy is one of North America's premier natural gas infrastructure plays. It has a strong presence in growth markets, which should lead to value-creating investment opportunities in the coming years. The recent acquisition of the Express-Platte Pipeline System enabled the company to diversify its portfolio to a growing market of crude oil pipeline businesses. The company's core fee-based businesses have the potential to move the needle towards solid earnings and cash flow growth. Management remains optimistic on its performance going forward due to its expansion program, which remains on track. With its market leading position, diversified asset portfolio and strong investment opportunities, we expect Spectra Energy to sustain the growth momentum. However, these positives have already been reflected in its valuation, leaving little space for above-market gains. Thus our Neutral recommendation remains unchanged.


Houston, Texas-based Spectra Energy Corporation (SE), through its subsidiaries and equity affiliates, engages in the ownership and operation of a portfolio of complementary natural gas-related energy assets. The company operates in four segments: U.S. Transmission, Distribution, Western Canada Transmission & Processing, and Field Services. The company also has 50% ownership in DCP Midstream, one of the largest natural gas gatherers and processors in the U.S. In Mar 2013, the company acquired the interest of Express-Platte Pipeline System.

The U.S. Transmission segment engages in the transportation and storage of natural gas for customers in various regions of eastern and southeastern United States and the Maritime Provinces in Canada.

The Distribution segment provides retail natural gas distribution services in Ontario, Canada, as well as natural gas transportation and storage services to other utilities and energy market participants in Ontario, Canada and the United States.

The Western Canada Transmission & Processing segment provides natural gas transportation, gathering, and processing services and natural gas liquid extraction, fractionation, transportation, storage and marketing to customers in Canada and the northern tier of the United States.

The Field Services segment gathers and processes natural gas, as well as fractionates, markets and trades natural gas liquids (NGL). It engages in gathering raw natural gas through gathering systems located in nine natural gas producing regions, consisting of the Mid-Continent, Rocky Mountain, east Texas-north Louisiana, Barnett Shale, Gulf Coast, South Texas, Central Texas, Antrim Shale and Permian Basin.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: SE , NGL

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