Enbridge Inc. ENB stock appears to be a solid bet now, based on strong fundamentals and compelling business prospects. The company’s shares have popped 5.4% over the past three months.
Headquartered in Calgary, Alberta, Enbridge is a leading energy infrastructure company. One of its businesses is the transportation of energy through the most extensive and advanced crude and liquids pipeline system that spreads across 17,018 miles globally. Through Mainline and Express pipelines, the company transports 2.8 million barrels of crude every day that accounts for almost 68% of crude oil production in Canada that is transported to the United States.
Enbridge currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold), offer the best investment opportunities for investors.
Let's see what makes Enbridge stock an attractive investment option at the moment.
Earnings estimate revisions have the greatest impact on stock prices. Over the past two months, the Zacks Consensus Estimate for earnings for the current year has improved 6.1%. During this time period, the stock has witnessed four upward revisions and one downward movement.
Positive Earnings Surprise History
Enbridge outpaced the Zacks Consensus Estimate in two of the trailing four quarters, missed once and met on another occasion. It delivered a four-quarter average earnings surprise of 8.2%.
Enbridge Inc Price and EPS Surprise
Enbridge has the longest and most advanced crude and liquids pipeline system in the world that spreads more than 17,018 miles. In Canada, the company is touted to be the largest natural gas distributer. Hence, it is quite obvious that a significant portion of the company’s earnings is generated from transportation operations, driven by a string of long-term contracts. The solid contract base will likely provide the company with stable cash flow in the coming years.
For 2020, it has reaffirmed its guidance for DCF per share in the band of C$4.50-C$4.80, the top end of which suggests a rise from the 2019 figure of $4.57. This reflects Enbridge’s efforts in strengthening overall businesses by shedding non-core assets and adding profitable growth projects.
The company has a total of $11 billion low-risk inventory of midstream growth projects that will come online from 2020 through 2023. This reflects its plan of securing additional fee-based revenues in the coming years. The company’s 118-mile PennEast Pipeline Project, which is expected to meet the growing demand of natural gas in New Jersey and Pennsylvania, is commendable.
Moreover, Enbridge commenced construction of the Fécamp offshore wind farm in the northern part of France. The speed of launching the project is remarkable. The project is expected to cost €2 billion ($2.23 billion) and generate 500 megawatts once it comes online in 2023. The move takes the company one step ahead with its renewable energy source plans.
Other Stocks to Consider
Other top-ranked players in the energy space include NGL Energy Partners LP NGL, Centennial Resource Development, Inc. CDEV and Cheniere Energy, Inc. LNG, each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
NGL Energy Partners’ bottom line for second-quarter 2020 is expected to rise 92.7% year over year.
Centennial Resource’s bottom line for the next year is expected to rise 50.9% year over year.
Cheniere Energy’s bottom line for second-quarter 2020 is expected to rise 200% year over year.
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Enbridge Inc (ENB): Free Stock Analysis Report
Cheniere Energy, Inc. (LNG): Free Stock Analysis Report
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