ENB - E Split: Enbridge's Economic Moat Weakening
2024-02-02 21:20:43 ET
Summary
- E Split Corp. is a leveraged play on shares of Enbridge Inc., with two share classes: Preferred and Class A.
- A large part of ENS's attractive distribution is simply a return of investors' own capital.
- Enbridge's Mainline system faces increased competition from the Trans Mountain pipeline expansion in the near-to medium term. In the long-run, Mainline may become a stranded asset.
- Diversification into gas distribution also risk Enbridge 'buying high' and paying high multiples.
A few months ago, I wrote an initiation article on E Split Corp. ( ENS:CA ), going over the mechanics of the split share corporate structure and some specific features of ENS. Since E Split Corp. is essentially a levered play on shares of Enbridge Inc. ( ENB ), I will present some thoughts on Enbridge's prospects in this article....
E Split: Enbridge's Economic Moat Weakening