We and our partners will store and/or access information on your device through the use of cookies and similar technologies, to display personalised ads and content, for ad and content measurement, audience insights and product development. Get in touch with us directly. Simply Wall St has no position in any stocks mentioned. While dividend payments have been relatively reliable, it would also be nice if earnings per share (EPS) were growing, as this is essential to maintaining the dividend’s purchasing power over the long term. This article by Simply Wall St is general in nature. Enbridge’s focus as an energy company spans across generation, transportation, and distribution of energy. Over the years, it has also been stocking its portfolio in alternative sources of energy such as in the generation of wind, solar, and geothermal energy. Is Enbridge Stock a Buy? Net interest cover measures the ability to meet interest payments. Net debt to EBITDA is a measure of a company’s total debt. Currently, the company is the fifth largest stock by market capitalization in the country, and the fourth highest in terms of companies that currently pay a dividend. Yahoo is part of Verizon Media. Paying out more than 100% of your free cash flow in dividends is generally not a long-term, sustainable state of affairs, so we think shareholders should watch this metric closely. Essentially we check that a) the company does not have too much debt, and b) that it can afford to pay the interest. While the dividends have been fairly steady, we’d wonder for how much longer this will be sustainable if earnings continue to decline. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company’s net income after tax. Enbridge is a giant in the midstream sector, but there are some key reasons to dislike it. Here's why you should still consider buying it. With Enbridge yielding 7.8% and having paid a dividend for over 10 years, many investors likely find the company quite interesting. Information about your device and internet connection, including your IP address, Browsing and search activity while using Verizon Media websites and apps. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. To enable Verizon Media and our partners to process your personal data select 'I agree', or select 'Manage settings' for more information and to manage your choices. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company’s dividend doesn’t live up to expectations. Since then, ENB stock has decreased by 10.2% and is now trading at C$38.58. One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. There are a few simple ways to reduce the risks of buying Enbridge for its dividend, and we’ll go through these below. Cash is slightly more important than profit from a dividend perspective, but given Enbridge’s payouts were not well covered by either earnings or cash flow, we would definitely be concerned about the sustainability of this dividend. Find out more about how we use your information in our Privacy Policy and Cookie Policy. ENB updated stock price target summary. How have hedgies been trading Enbridge Inc (NYSE:ENB)? Two investment analysts have rated the stock with a sell rating, three have assigned a hold rating and fifteen have given a buy rating to the company. If a company is paying more than it earns, then the dividend might become unsustainable – hardly an ideal situation. SA News Wed, Jul. Let's review the new hedge fund action encompassing Enbridge Inc (NYSE:ENB). To enable Verizon Media and our partners to process your personal data select 'I agree', or select 'Manage settings' for more information and to manage your choices. Are you looking for the Enbridge stock review? *Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020Have feedback on this article? At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Dividends are usually paid out of company earnings. To summarise, shareholders should always check that Enbridge’s dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. After falling roughly 45% from its … Interest cover of 2.86 times its interest expense is starting to become a concern for Enbridge, and be aware that lenders may place additional restrictions on the company as well. We and our partners will store and/or access information on your device through the use of cookies and similar technologies, to display personalised ads and content, for ad and content measurement, audience insights and product development. Simply Wall Street Pty Ltd The dividend has been stable over the past 10 years, which is great. If earnings continue to decline, the dividend may come under pressure. Concerned about the content? Enbridge sees more gradual pace of recovery in crude volumes. Shares of Enbridge Inc (NYSE:ENB) (TSE:ENB) have been given an average recommendation of "Buy" by the twenty ratings firms that are covering the stock, Marketbeat Ratings reports. that you should be aware of before investing. 24 Kippax St, Sydney Learn more about, by checking our visualisation of its financial health. Net interest cover can be calculated by dividing earnings before interest and tax (EBIT) by the company’s net interest expense. SA News Wed, Aug. 05 6 Comments. Dividends per share have grown at approximately 16% per year over this time. Explore this interactive chart for our latest analysis on Enbridge! A quick check of its financial situation can be done with two ratios: net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and net interest cover. We aim to bring you long-term focused analysis driven by fundamental data. Using these criteria, Enbridge looks quite suboptimal from a dividend investment perspective. Enbridge Inc. analyst ratings, historical stock prices, earnings estimates & actuals. ENB updated stock price target summary. Our research team consists of equity analysts with a public, market-beating track record. You can change your choices at any time by visiting Your Privacy Controls. Low interest cover and high debt can create problems right when the investor least needs them, and we’re reluctant to rely on the dividend of companies with these traits. Cash flows can be lumpy, but this dividend was not well covered by cash flow. Enbridge (TSE:ENB) dividend and stock analysis. Promoted If you’re looking to trade Enbridge, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Yahoo is part of Verizon Media. Here it is. With rapid dividend growth and no notable cuts to the dividend over a lengthy period of time, we think this company has a lot going for it. Information about your device and internet connection, including your IP address, Browsing and search activity while using Verizon Media websites and apps. Enbridge has net debt of 6.14 times its EBITDA, which implies meaningful risk if interest rates rise of earnings decline. The average twelve-month target price among … ACN 600 056 611, Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Alternatively, email [email protected]. We think this could suggest some resilience to the business and its dividends. Dividend paying stocks like Enbridge Inc. tend to be popular with investors, and for good reason – some research suggests a significant amount of all stock market returns come from reinvested dividends. For example, we’ve identified 4 warning signs for Enbridge (2 are potentially serious!) Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Remember, you can always get a snapshot of Enbridge’s latest financial position, by checking our visualisation of its financial health. 29 3 Comments. PennEast project gets favorable FERC environmental review. Enbridge paid out almost all of its cash flow and profit as dividends, leaving little to reinvest in the business. Find out more about how we use your information in our Privacy Policy and Cookie Policy. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Every investor should make an assessment of whether the company is taking steps to stabilise the situation. Unless there are extenuating circumstances, from the perspective of an investor who hopes to own the company for many years, a payout ratio of above 100% is definitely a concern. Enbridge Inc. analyst ratings, historical stock prices, earnings estimates & actuals. Enbridge stock yields 8% at the moment, one of the highest among Canadian broader markets. Enbridge paid out 137% of its free cash last year.

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