Market Chatter: Enbridge Near 30-Year High on Earnings Growth: Report
Enbridge Inc. (ENB.TO), the largest transporter of Canadian crude to the U.S., is trading at its highest level in almost three decades as it shakes off criticism over oil spills, delays in new crude routes and valuation concerns, Bloomberg reports.
Enbridge last week reached its highest point since Jan. 5, 1983, giving it a price-to-earnings ratio of 40, better than 81% of its global peers. With a market capitalization of $33.1 billion, the Calgary-based company has the second-highest value among large stocks in the Standard & Poor's/TSX Composite Index, behind only Crescent Point Energy Corp. (CPG), data compiled by Bloomberg show.
"There have been a couple of stumbles along the way with high profile leaks, but they have not stemmed the tide of strong earnings and strong dividend growth," said Randle Smith, a Chicago-based portfolio manager with Duff & Phelps Investment Management Co. who helps manage $4.9 billion of global utilities and infrastructure investments, including more than 2 million Enbridge shares.
Enbridge's shares have shrugged off a series of pipeline leaks, including a 2010 spill in Michigan that polluted the Kalamazoo River with more than 20,000 barrels of crude and cost $800 million to clean up and a more recent spill on July 27 that leaked 1,200 barrels near Grand Marsh, Wisconsin. The company is also facing opposition to its proposed $5.5 billion Northern Gateway route to carry oil sands crude to the Pacific coast through British Columbia.
Enbridge already owns and operates Canada's largest oil pipeline network spanning 24,600 kilometers that ships more than 2.3 million barrels of crude oil and liquids a day. It is counting on growing demand for the fossil fuel in Asia and Canada's ability to supply the region from its oil sands reserves, the world's third largest.
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