Enbridge Inc. (ENB - Free Report) recently announced the conclusion of a common stock offering. A total of 33,456,003 stocks were offered to select investors through private placement that fetched as much as C$1.5 billion.
The firm will likely utilize the proceeds to finance capital projects and lower debt load.
Following the merger with midstream player Spectra Energy on Feb 27, Enbridge has created the largest energy infrastructure company in North America. Now, Enbridge intends to streamline its portfolio by spending as much as C$22 billion on growth and maintenance developments through 2020-end. While majority of the capital budget – C$14 billion – will likely be funded by internally generated cash, Enbridge will finance C$3 billion through the sale of non-core assets and C$1.5 billion through equity capital – by issuing common stocks.
The strong focus on growth and maintenance projects by divesting non-core assets will likely generate steady and stable cashflow to the shareholders. It is to be noted that Enbridge has figured out C$10 billion worth of non-core assets. Of the total, the company expects to monetize at least C$3 billion in 2018 through the divestment of some unregulated natural gas midstream assets and onshore renewable operations.
Enbridge’s debt reduction initiative is worth a mention. With an aim to lower its debt burden by C$4 billion, the company is planning to improve the credit matric by achieving a Debt to EBITDA multiple of 5x and 4.5x by the end of 2018 and 2020, respectively.
Headquartered in Calgary, Canada, Enbridge is an energy infrastructure company. The company’s pricing chart fails to impress. Year to date, the stock has lost 8.7%, underperforming the industry’s 3.4% decline.
Presently, Enbridge carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are China Petroleum & Chemical Corporation (SNP - Free Report) , Northern Oil and Gas, Inc. (NOG - Free Report) and ExxonMobil Corporation (XOM - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Beijing, China Petroleum is a leading integrated energy player. The company will likely witness year-over-year earnings growth of 59.1% in 2017.
Based in Minnetonka, MN, Northern Oil is an upstream energy player. The company’s 2017 revenues are estimated to grow almost 44%.
Headquartered in Irving, TX, ExxonMobil is the largest publicly traded energy firm. The company managed to beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 8.81%.
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