As far as companies in the oil and gas sector go, Enbridge Inc. (TSX:ENB)(NYSE:ENB) remains one of my top picks for long term value and income investors alike. Enbridge’s high single digit dividend yield is tremendous relative to the company’s forward looking prospects and stable cash flow growth trajectory.
In this article, I’m going to discuss why investors ought to consider Enbridge as a core portfolio holding, for those with income needs.
Fundamentally, Enbridge’s valuation at around eight times cash flow is well below its recent historical levels, making this income play an attractive opportunity from a value perspective. In this sector, Enbridge has some of the most attractive fundamentals given its growth profile, something investors with a long term investing time horizon should take into consideration.
This growth can be attributed to both projected volume increase due to demand growth over time but also to new projects the company has underway, namely its Line 3 expansion which is expected to be live in 2021.
Any existing pipeline network has tremendous value today due to the difficulty getting new pipelines approved. With an expansion of the company’s existing network likely to pass regulatory hurdles, Enbridge is unique in its ability to increase its revenue and cash flow over time. I would encourage income investors to highly consider Enbridge at these levels, particularly in this low interest rate environment.
Invest wisely, my friends.
