Enbridge Inc (TSX:ENB)(NYSE:ENB) is down more than 17% since the start of the year and outside of 2020, the last time its stock was this low was in late 2018 during the crash that took place late that year.
The energy infrastructure company’s in a tough spot because as demand for oil is low as people are staying indoors and not traveling, that means there’s not going to be lots of activity on its pipelines.
The company released its second-quarter results on July 29 and Enbridge noted that throughput on its Mainline was down 400,000 barrels per day when compared to the first quarter. But the company did say it’s been noticing a steady improvement. Overall, it still wasn’t too bad of a quarter as Enbridge did show resiliency, posting a per-share profit of $0.82 compared to $0.86 in the same period a year ago.
The company said in their earnings release that they’ve weathered the near-term effects of the pandemic on our business well. COVID-19 is still nowhere near over but so far Enbridge is doing okay.
The stock’s currently trading at a forward price-to-earnings multiple of less than 17 and its price-to-book ratio of 1.5 also isn’t very expensive.
This could be a good buy for dividend investors as Enbridge is currently paying shareholders an annual yield of 7.6%. The big test will be whether it’ll raise its dividend again. Its dividend payments of $0.61 in 2017 have grown to $0.81, up 32.8%.
Enbridge may be one of the safer buys for investors who want exposure to oil and gas and with the stock down and trading at some low multiples, there’s extra incentive to buy now.
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