A prudent investment decision involves buying well-performing stocks at the right time, while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bull run.
Enbridge Inc. (ENB - Free Report) is a leading energy infrastructure stock that has performed well so far this year and has the potential to sustain the momentum in the near term. So, if you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes it an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse so far this year. Shares of Enbridge have returned 22.1% year to date, outperforming the 6.8% growth of the industry it belongs to.
Solid Rank: Enbridge currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Two estimates for 2019 have moved north in the past 60 days versus no downward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2019 has inched up to $2.08 from $2.00. The figure indicates a 1.5% rise from the year-ago reported profits.
Positive Earnings Surprise History: Enbridge has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate thrice in the trailing four quarters, delivering an average positive earnings surprise of 11.3%.
Enbridge has the longest and most advanced crude and liquids pipeline system in the world that spreads across 17,018 miles. The company is responsible for transporting around 25% of the crude oil produced in North America. In Canada, it 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. These substantial contracts will likely provide the company with stable cash flow in the coming years.
It has placed two key projects online in 2019 and is planning to bring online several major projects through 2019 to 2022. Overall, C$19 billion worth of low-risked projects are likely to fetch the company with stable fee-based revenues and will raise the value of its shareholders in the coming years. Moreover, the company has been strongly committed to return cash to its shareholders. In fact, through 2020, Enbridge expects its dividend to grow 10% annually.
The Spectra Energy acquisition has enabled Enbridge to diversify its asset portfolio, and generate cash flow from natural gas and oil midstream infrastructure properties. Enbridge has become the largest energy infrastructure company in North America, following the acquisition. The company is also well positioned to capitalize on the growing need for natural gas distribution owing to the rise in population in Toronto. Notably, Enbridge is considered a notable natural gas utility in North America, courtesy of rapidly expanding business.
Other Stocks to Consider
Other top-ranked stocks in the energy space include Antero Midstream Corporation (AM - Free Report) , CNX Resources Corporation (CNX - Free Report) , and Contango Oil & Gas Company (MCF - Free Report) . All these companies also carry a Zacks Rank #2.
Antero Midstream’s bottom line for the current quarter is expected to rise 120% year over year.
CNX Resources’ 2019 earnings per share have witnessed three upward movements and no downward revision in the past 30 days.
Contango Oil & Gas’ bottom line for the current year is expected to rise around 87% year over year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
See their latest picks free >>