Are you looking for the Enbridge stock review? Here it is.
Enbridge’s focus as an energy company spans across generation, transportation, and distribution of energy. Over the years, it has also been stocking its portfolio in alternative sources of energy such as in the generation of wind, solar, and geothermal energy.
It is indisputably impossible to talk about the emergence and growth of the energy industry in North America without mentioning Enbridge Inc. The history of this multinational corporation traces back to one of the earliest discoveries of oil in the country and to Imperial Oil.
Enbridge’s oil pipeline network is the longest in the world. Through this network, they transport 28 percent of North America’s crude oil and also lead the rest of the pack in natural gas gathering, processing, transporting, and distribution.
Headquartered in Calgary, Alberta, the company has about 16,000 people on the payroll. In 2016, it generated $34.5 billion in revenue and $2.1 billion in profits. In that year, Enbridge also managed a total asset base of $85.8 billion.
Enbridge is a publicly-traded company and is listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE).
A Brief History Of Enbridge Inc.
In 1947, after the Imperial Oil Company struck oil in Leduc, Alberta, it was the beginning of the oil industry in the province.
Two years later, on April 30, 1949, Imperial Oil expanded into building pipeline networks to get Alberta’s oil to refineries. This birthed the Interprovincial Pipe Line Company (IPL).
Starting with a $73 million budget for constructing their first pipeline, by October 1950, their pipeline network started transporting oil from Edmonton to Superior, Wisconsin. IPL continued to spread its tentacles and continued to build more pipelines like the one that led from Wisconsin back to Ontario in Canada in 1953.
The 1950s and 1960s were a particularly robust time for IPL as they expanded their network across the US via their subsidiary, the Lakehead Pipe Line Company.
Lakehead constructed pipelines that connected the cities of Detroit, Buffalo, and Chicago among others. By the early 1970s, Interprovincial was responsible for daily crude transportation of 1 million barrels across the continent.
Enbridge – 1970 and Beyond
The rest of the 1970s saw an expansion focus in Canada, like with the $247 million expansion from Alberta to Montréal in 1976. In the mid-1980s, IPL added the oilfields at Northwest Territories and Norman Wells to their pipeline network.
The company first changed its name in 1988 to Interhome Energy Inc. During this period, they also began to execute their expansion strategy via acquisitions.
One of its earliest purchases was when they bought Consumers’ Gas – now known as Enbridge Gas Distribution Inc – in 1996. This marked their foray into natural gas transportation. Around the same period, the company again changed its name from Interhome Energy Inc. to IPL Energy Inc.
IPL Energy’s diversification into the gas distribution business did not impede their continuous pipeline expansion plans. All the while, they also bought stakes in companies like AltaGas Services, and Chicap oil pipeline, and Ocensa oil pipeline, the last two being strict to expand their oil pipeline network (they would end up selling their Ocensa stake in 2009).
The company’s present name, Enbridge Inc., came to be in 1998. The name is a portmanteau of the words ‘energy’ and ‘bridge’.
Enbridge – 2001 and Beyond
As Enbridge Inc., in 2001, they continued to expand their natural gas efforts with the purchase of Midcoast Energy Resources in Houston, marking their internal foray in gas distribution. Further acquisitions included Shell Gas Transmission LLC in 2005 along with a majority stake in a plethora of offshore natural gas pipelines.
Enbridge also started investing in renewable energy in 2001. One of its earliest investments was in the Sunbridge wind power project in Saskatchewan. Eleven years later, the company was neck-deep in about twenty other renewable energy projects including wind farms, solar energy, waste heat recovery programs, and geothermal energy, all totalling an investment of $5 billion.
Over the years, the company has also taken care to update its operational policies so that it is more environmentally friendly. Consequently, Enbridge Inc. experienced a time where it was listed as one of the most sustainable companies in the world for eight consecutive years. In 2016, it also came in at the 12th position on Newsweek’s list of The World’s Most Sustainable Companies. This was the same year that they acquired Spectra Energy for $28 billion in an all-stock deal.
Enbridge Inc. is listed under the ticker symbol ENB on the Toronto Stock Exchange.
The company’s focus on expanding its pipeline, natural gas diversification, and growth by acquisition has put them in enviable stead when it comes to the energy industry in North America. But the energy landscape has also been replete with competition during their time. This is reflected in their share price movement since the early 1990s.
In 1991, ENB share price opened for the year at $3.17 and closed at $3.59. In 2019, ENB opened at $31.58 and closed at $39.77. From the close of 1991 to 2019 represents a share price growth of 1,066%.
The company’s share price has experienced some interesting annual growth rates. Interestingly, 1998 – the year they changed the name to Enbridge – does not belong to this category. In fact, so far 1998 has been one of their slowest growth years. The year recorded a growth rate of just 2.09%, after closing at $5.63 the previous year and closing at $5.74 in 1998. Years like 1992 (–38.26%), 1994 (–15.37%), 1999 (–12.36%) all ended in the red during the 1990s.
Below Screenshot – Enbridge Stock (ENB) price today:
In the 2000s, there have been a few red years as well. The year 2008 was particularly red for most of the global economy. For Enbridge’s stock price, there was a 19.69% drop as it opened at $20.28 and closed at $16.24.
Other read years in the 2000s include 2001 (–4.92%) and 2002 (–0.29%). The red years of the 2010s include 2015 (–35.44%), 2017 (–7.15%), and 2018 (–20.53%), with 2015 being the worst in terms of percentages.
Owing to the current global health pandemic brought on by the coronavirus, the global economy has once again started the year off on a rough footing. Enbridge’s share price closed 2019 with a 27.96% rise (opened at $31.58, closed at $39.77). However, since the turn of the year, the ENB share price has plummeted more than 27%. As of April 9, 2020, the share price stood at $28.70.
Enbridge Stock Price
In the past 30 years, ENB share price had its highest percentage increase in 1997 (55.87%) and its highest percentage drop in 1992 (38.26%).
Enbridge’s dividend has grown steadily in the 2010s. In 2013, the dividend payout to shareholders stood at $0.3150 in the first quarter of that year.
In the fourth quarter of 2013, it was at $0.35. It broke the $0.50 mark in the fourth quarter of 2015 when the dividend stood at $0.53. It went on to break the $0.60 mark in the second quarter of 2017 ($0.61) and the $0.70 mark in the fourth quarter of 2018 ($0.7380). The total dividends paid for 2019 was $2.95.
The last dividend change was for the quarter reading 10th December 2019 to 1st March 2020. The dividend for this quarter was $0.81, recording a 6.31% dividend yield and an increase of $0.0720 from the last dividend value.
Enbridge Stock Dividend (ENB)
First of all, Enbridge or the ENB stock pays out excellent dividends per quarter. It won’t be wrong to say that Enbridge is one of the best dividend-paying companies for decades now. They have been distributing dividends for over 65 years to date.
Another Interesting part to note here is that ENB being a blue-chip company has increased its dividend for the past 25 years straight at a staggering growth of 11% CAGR. Woohoo!
The screenshot below – Showing the dividend increase of ENB stock over the years.
The screenshot below will show you the latest quarterly dividends and the increases by Enbridge:
Whether you like the Oil & Gas Industry or not, whether the news is all negative about Enbridge, I’m 100% sure this is one such stock that should be in every investor’s portfolio. The Dividends alone will put a smile on your face.
Enbridge is Canada’s foremost energy company and one of the top industry names in the continent. Even with the global economic instability of 2020, Enbridge’s stock remains one of the best choices for investing in. Over the last three decades, it has shown its resilience in pushing for more success. At the operational level, Enbridge is one of the most sustainable and environmentally responsible energy companies in the world and it has been recognized as such in many notable circles.
With consistent domestic and international expansion, diversification, and acquisition, Enbridge has proven so far to be a good bet for investors who prioritize security in their portfolio. You may not get the same outlandish growth as with Berkshire Hathaway, but you may just be able to rest easier concerning your investments.
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Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.