When thinking about oil pipelines and comparing such investments to cannabis firms or cryptocurrencies, the distinction often becomes clear right away: having a stable, long-term asset underpinning one’s portfolio is very different from buying and holding a short-term asset which may experience tremendous volatility and have the potential to destroy one’s long-term saving goals in a very short amount of time.
The value that Enbridge Inc. (TSX:ENB)(NYSE:ENB) and other energy infrastructure companies have has, in my opinion, not been fully realized by the market in recent years.
Enbridge has maintained its double-digit dividend growth rate, invested in key assets via its Spectrum Energy acquisition in 2017 which saw the company branch out from being a pure-play energy transportation business into other related lines of business, and has the ability to take advantage of sector-specific growth trends in 2018 which should make Enbridge a top performer for most portfolios.
The safety Enbridge provides investors with, courtesy of the company’s long-term capacity related contracts, has in many ways been underappreciated by the market in recent years due to other sectors which have taken the purview off of the energy sector as a whole.
In that regard, Enbridge deserves extra consideration, given the fact the company has an extremely low correlation to the price of oil, the primary factor pushing many investors toward the exits.
While I would not recommend investors put their money to risk with Canadian heavy oil producers in 2018, Enbridge remains one of my top value picks every investor should consider.
Invest wisely, my friends.
