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Enbridge (ENB) Up 15% in 3 Months: Room for Further Upside?
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Enbridge Inc’s (ENB - Free Report) shares have jumped 15% in the past three months compared with 12.5% growth of the composite stocks belonging to the industry. The Zacks Consensus Estimate for ENB’s earnings per share for 2022 and 2023 has witnessed upward revisions in the past 60 days.
Factors Favoring the Stock
Currently carrying a Zacks Rank #3 (Hold), Enbridge has an extensive network of pipeline assets responsible for transporting roughly 30% of North American crude oil production. The midstream properties are also responsible for carrying as much as 20% of the natural gas Americans consume. Through its Gas Distribution and Storage operations, Enbridge has delivered roughly 2 trillion cubic feet of natural gas, thereby serving 75% of Ontarians.
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. Underpinned by long-term contracts, Enbridge’s business model also has considerably lower volume risk exposure.
Enbridge has estimated more than C$13 billion in secured capital projects. Thus, the company is ensuring more cashflows in the coming years.
Image Source: Zacks Investment Research
Risks
Compared to composite stocks belonging to the industry, Enbridge’s balance sheet has more debt exposure.
Line 5 is a critical infrastructure responsible for supplying 55% of the propane demand in Michigan. A few years back, the company entered into agreements with the state to construct a tunnel that would encase a replacement section of the Line 5 oil pipeline to enhance safety. However, repeated protests for shutting down the line on safety concerns could affect Enbridge.
Final Words
Overall, there is room for further upside since the leading midstream player is comparatively a safe stock in the volatile market.
Halliburton is a well-known name in providing products and services to the energy companies. Over the past seven days, it has witnessed upward earnings estimate revisions for 2022 and 2023, respectively.
MPLX has ownership and operating interests in midstream energy infrastructure and logistics assets, thereby generating stable cashflows. With a strong focus on returning capital to unit holders, MPLX announced that as of third-quarter 2022-end, it had roughly $1 billion available under its unit repurchase authorizations.
DCP Midstream is a leading provider of midstream services, having a fully integrated and resilient business model. With 12 billion cubic feet of natural gas storage assets, the master limited partnership has 2.8 billion cubic feet of daily natural gas pipeline capacity. DCP Midstream strongly focuses on strengthening its balance sheet with the foremost priority of reducing debt load.
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Enbridge (ENB) Up 15% in 3 Months: Room for Further Upside?
Enbridge Inc’s (ENB - Free Report) shares have jumped 15% in the past three months compared with 12.5% growth of the composite stocks belonging to the industry. The Zacks Consensus Estimate for ENB’s earnings per share for 2022 and 2023 has witnessed upward revisions in the past 60 days.
Factors Favoring the Stock
Currently carrying a Zacks Rank #3 (Hold), Enbridge has an extensive network of pipeline assets responsible for transporting roughly 30% of North American crude oil production. The midstream properties are also responsible for carrying as much as 20% of the natural gas Americans consume. Through its Gas Distribution and Storage operations, Enbridge has delivered roughly 2 trillion cubic feet of natural gas, thereby serving 75% of Ontarians.
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. Underpinned by long-term contracts, Enbridge’s business model also has considerably lower volume risk exposure.
Enbridge has estimated more than C$13 billion in secured capital projects. Thus, the company is ensuring more cashflows in the coming years.
Image Source: Zacks Investment Research
Risks
Compared to composite stocks belonging to the industry, Enbridge’s balance sheet has more debt exposure.
Line 5 is a critical infrastructure responsible for supplying 55% of the propane demand in Michigan. A few years back, the company entered into agreements with the state to construct a tunnel that would encase a replacement section of the Line 5 oil pipeline to enhance safety. However, repeated protests for shutting down the line on safety concerns could affect Enbridge.
Final Words
Overall, there is room for further upside since the leading midstream player is comparatively a safe stock in the volatile market.
Stocks to Consider
A few better-ranked stocks in the energy space are Halliburton Company (HAL - Free Report) , MPLXLP (MPLX - Free Report) and DCP Midstream, LP . While Halliburton and MPLX carry a Zacks Rank #2 (Buy), DCP Midstream sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Halliburton is a well-known name in providing products and services to the energy companies. Over the past seven days, it has witnessed upward earnings estimate revisions for 2022 and 2023, respectively.
MPLX has ownership and operating interests in midstream energy infrastructure and logistics assets, thereby generating stable cashflows. With a strong focus on returning capital to unit holders, MPLX announced that as of third-quarter 2022-end, it had roughly $1 billion available under its unit repurchase authorizations.
DCP Midstream is a leading provider of midstream services, having a fully integrated and resilient business model. With 12 billion cubic feet of natural gas storage assets, the master limited partnership has 2.8 billion cubic feet of daily natural gas pipeline capacity. DCP Midstream strongly focuses on strengthening its balance sheet with the foremost priority of reducing debt load.