Enbridge Inc. Stock Gains on News it Plans to Sell Assets
Enbridge Inc. (TSX:ENB)(NYSE:ENB) stock was up 5% in afternoon trading on November 30 after the company announced it plans to sell $3 billion in assets.
The company has focused in on up to $10 billion in “non-core” assets, $3 billion of which it plans to shed in 2018. Enbridge also relieved some skeptics after addressing its dividend-growth trajectory. It said it plans to grow its dividend by 10% annually into 2020.
When Enbridge announced its third quarter results on November 2, some were anxious that there was little mention of its plans for double digit dividend growth. Though the company did hike its dividend to a 5.1% yield at offering. In the third quarter Enbridge reported net earnings of $765 million compared to a net loss of $103 million in Q3 2016.
The company also reported progress with its Line 3 Replacement Program in Canada and Wisconsin, but a decision from Minnesota regulators is still pending. The Minnesota Commerce Department released a report in September estimating that the Line 3 Replacement was not needed. In addition to this, the proceedings have been mired in political controversy as a broad array of protestors oppose construction.
Enbridge stock has failed to reap gains from the recent oil rally. The Organization of Petroleum Exporting Countries (OPEC) agreed today to extend its production cut to the end of 2018. With a decision coming in Minnesota in early 2018, Enbridge should be provided with some clarity that should boost investor sentiment for the long term.