ENB - Enbridge: Solid Business But Hold Due To Debt And Dividend Concerns

2024-06-24 22:37:12 ET

Summary

• Enbridge is an attractive stock due to its 7.73% dividend yield. I present a more contrarian view in this article.
• The company has built an established presence and long-term drivers remain intact. In the long term, the business might perform well.
• However, I believe the stock is accurately priced due to concerns regarding asset growth, debt financing, and the sustainability of the dividend.
• That is why the stock receives a "Hold" rating.

Investment Thesis

The energy sector has been an interesting space for the last few years.

First, Europe began seeking alternative energy partners after Russia invaded Ukraine, causing prices to spike. American companies benefited massively from this. Now, with developing technologies like artificial intelligence, we need more power and more commodities to produce power.

Enbridge ( ENB ) ( ENB:CA ) facilitates the transportation of these commodities from their extraction points to their destinations. The company has strong long-term drivers. Unfortunately, this is not the best time to invest in this company....

For further details see: