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Enbridge (ENB) Surges 19.4% in the Past Year: Any Upside Left?
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Shares of EnbridgeInc. (ENB - Free Report) have jumped 19.4% in the past year compared with the 13.8% gain of the composite stocks belonging to the industry. The Zacks Consensus Estimate for Enbridge’s earnings per share for 2021 and 2022 suggests year-over-year growth of 23.2% and 9.7%, respectively.
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Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
Currently carrying a Zacks Rank #3 (Hold), Enbridge has an extensive network of pipeline assets responsible for transporting roughly 25% of North American crude oil production. The midstream properties are also responsible for carrying as much as 20% of the natural gas Americans consume. In Ontario and Quebec, Enbridge is dedicatedly serving 3.8 million retail customers through its Gas Distribution and Storage operations.
With a significant portion of its assets being contracted by shippers for the long term, its business model is less exposed to volatility in oil and gas prices due to the coronavirus pandemic. Underpinned by long-term contracts, Enbridge’s business model also has lower volume risk exposure.
ENB has roughly placed into service C$10-billion growth capital projects in 2021. Enbridge is expecting significant growth in free cashflows in 2022, backed by these project backlogs.
For 2022, Enbridge is projecting EBITDA in the band of C$15 to C$15.6 billion and distributable cash flow (DCF) per share in the range of C$5.2 to C$5.5. The metrics for this year thus suggest an improvement as compared to last year. By 2024, Enbridge expects average annual DCF per share growth of 5% to 7%.
Enbridge has a strong commitment toward returning capital to shareholders. It has raised its quarterly dividend by 3% to 86 Canadian cents per share. Thus, Enbridge has increased its 2022 dividend (C$3.44 annualized), thereby marking a dividend increase for 27 straight years. Enbridge also intends to establish a share buyback program through which it will be able to repurchase C$1.5 billion of outstanding shares.
Overall, the attractive financial outlook establishes the fact that Enbridge’s business model is robust with minimal exposure to coronavirus-induced commodity price volatility and volume risks.
Considering these positive factors, it seems a lot of room is left for Enbridge to witness further price appreciation.
Murphy USA is well-positioned to gain from improving gasoline demand in the coming months since it is a prominent retailer of gasoline and convenience merchandise. Having a network of retail gasoline and convenience stores in 27 states, Murphy USA is being able to serve an estimated two million customers every day.
Over the past 30 days, Murphy USA has witnessed upward earnings estimate revisions for 2021 and 2022, respectively.
The Williams Companies is well poised to capitalize on mounting demand for clean energy since it is engaged in transporting, storing, gathering and processing natural gas and natural gas liquids.
With its pipeline networks spread across more than 30,000 miles, The Williams Companies connects premium basins in the United States to the key market. WMB’s assets can fulfill 30% of the nation’s natural gas consumption, utilized for heating purposes and clean-energy generation.
MPLX LP generates stable cashflows and has lower exposure to commodity price volatility since it operates midstream energy infrastructure and logistics assets. MPLX LP also generates cashflows from the fuels distribution business.
Over the past 60 days, MPLX LP has witnessed upward earnings estimate revisions for 2021 and 2022, respectively.
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Enbridge (ENB) Surges 19.4% in the Past Year: Any Upside Left?
Shares of EnbridgeInc. (ENB - Free Report) have jumped 19.4% in the past year compared with the 13.8% gain of the composite stocks belonging to the industry. The Zacks Consensus Estimate for Enbridge’s earnings per share for 2021 and 2022 suggests year-over-year growth of 23.2% and 9.7%, respectively.
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
Currently carrying a Zacks Rank #3 (Hold), Enbridge has an extensive network of pipeline assets responsible for transporting roughly 25% of North American crude oil production. The midstream properties are also responsible for carrying as much as 20% of the natural gas Americans consume. In Ontario and Quebec, Enbridge is dedicatedly serving 3.8 million retail customers through its Gas Distribution and Storage operations.
With a significant portion of its assets being contracted by shippers for the long term, its business model is less exposed to volatility in oil and gas prices due to the coronavirus pandemic. Underpinned by long-term contracts, Enbridge’s business model also has lower volume risk exposure.
ENB has roughly placed into service C$10-billion growth capital projects in 2021. Enbridge is expecting significant growth in free cashflows in 2022, backed by these project backlogs.
For 2022, Enbridge is projecting EBITDA in the band of C$15 to C$15.6 billion and distributable cash flow (DCF) per share in the range of C$5.2 to C$5.5. The metrics for this year thus suggest an improvement as compared to last year. By 2024, Enbridge expects average annual DCF per share growth of 5% to 7%.
Enbridge has a strong commitment toward returning capital to shareholders. It has raised its quarterly dividend by 3% to 86 Canadian cents per share. Thus, Enbridge has increased its 2022 dividend (C$3.44 annualized), thereby marking a dividend increase for 27 straight years. Enbridge also intends to establish a share buyback program through which it will be able to repurchase C$1.5 billion of outstanding shares.
Overall, the attractive financial outlook establishes the fact that Enbridge’s business model is robust with minimal exposure to coronavirus-induced commodity price volatility and volume risks.
Considering these positive factors, it seems a lot of room is left for Enbridge to witness further price appreciation.
Stocks to Consider
Better-ranked players in the energy space include Murphy USA Inc. (MUSA - Free Report) , The Williams Companies Inc (WMB - Free Report) and MPLX LP (MPLX - Free Report) . While Murphy USA and The Williams Companies sport a Zacks Rank #1 (Strong Buy), MPLX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is well-positioned to gain from improving gasoline demand in the coming months since it is a prominent retailer of gasoline and convenience merchandise. Having a network of retail gasoline and convenience stores in 27 states, Murphy USA is being able to serve an estimated two million customers every day.
Over the past 30 days, Murphy USA has witnessed upward earnings estimate revisions for 2021 and 2022, respectively.
The Williams Companies is well poised to capitalize on mounting demand for clean energy since it is engaged in transporting, storing, gathering and processing natural gas and natural gas liquids.
With its pipeline networks spread across more than 30,000 miles, The Williams Companies connects premium basins in the United States to the key market. WMB’s assets can fulfill 30% of the nation’s natural gas consumption, utilized for heating purposes and clean-energy generation.
MPLX LP generates stable cashflows and has lower exposure to commodity price volatility since it operates midstream energy infrastructure and logistics assets. MPLX LP also generates cashflows from the fuels distribution business.
Over the past 60 days, MPLX LP has witnessed upward earnings estimate revisions for 2021 and 2022, respectively.