Enbridge: A $41 Billion Growth Backlog Meets A Mainline Volume Threat (Archive, Full Access)
Enbridge’s growth backlog is offset by a Mainline Pipeline volume threat.
This 5-Minute Pitch was originally published on Seeking Alpha. It is shared here to showcase my work and track record. I also publish full 5-Minute Pitches on this site. This will be behind a paywall, accessible to Hunter Tier members.
Elevator Pitch
- Enbridge’s CAD 41 billion secured growth backlog supports a 5% long-term CAGR in adjusted EBITDA, DCF per share, and EPS, with 2027 a major commissioning year.
- The Mainline System contributes roughly one-third of Enbridge EBITDA, making emerging competing egress pipelines a material medium-term throughput risk.
- Debt to EBITDA is 5.1x, above Enbridge’s 4.5x to 5.0x target, while interest expense consumes roughly 27% of adjusted EBITDA. This is a risk to monitor amid rising rates.
- ENB trades at 13.0x 1-yr fwd EV/EBITDA, above peers and its historical median, while technicals indicate a range-bound share price near support.
- I rank CAD denominated preferreds above USD denominated preferreds to simplify against FX risks, whilst preferring securities with a rate reset. I think the preferreds are more insulated than the common stock against some operational business risks.
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