Trend: Enbridge has returned 8% in price gains and dividends to investers in 2008.
Jim Jubak at MSN Money recommends a stock weathering the financial storm well with pipeline and windpower projects. Excerpts below.
Link: Another devil in the financial crisis - MSN Money.
Jubak writes:
Enbridge (ENB) has held up well during the bear market. The total return -- price gains of 4.56% and dividend payments of $1.32 a share since my December 2007 buy -- comes to 8.4%. Some of that is the result of the stock's dividend, about 3.1% as of Sept. 22.
But more, I think, is related to on-track progress in the company's new pipeline and wind-power projects. As these projects go into service, they go from being a drain to being a contributor to Enbridge's bottom line. For example, the Waupisoo Pipeline, to bring oil from the Alberta oil sands to Edmonton, went into service in the second quarter, a month ahead of schedule. The company's Ontario Wind Project is on track for completion later this year. The Alberta Clipper project remains on schedule for 2010.
It has also helped the stock that the company has been able to raise $1.4 billion from its sale of a 25% interest in Spanish pipeline company Compania Logistica de Hidrocarburos. That's capital that Enbridge doesn't have to raise in today's volatile financial markets.
As of Sept. 23, I'm increasing my target price for shares of Enbridge to $48 a share by February 2009 from my prior target of $46 by December 2008. (Full disclosure: I own shares of Enbridge in my personal portfolio.)
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