ENB Trades at Premium Valuation: Is the Stock a Buy or Hold Now?

Zacks12-10

Enbridge Inc. ENB is currently considered relatively overvalued, trading at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 16.74x. This figure surpasses the broader industry average of ...

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ENB is currently considered relatively overvalued, trading at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 16.74x. This figure surpasses the broader industry average of ...</p>\n\n<a href=\"https://finance.yahoo.com/news/enb-trades-premium-valuation-stock-140400615.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU2237443382.USD","symbol_name":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA USD","start_time":0,"source_url":"https://finance.yahoo.com/news/enb-trades-premium-valuation-stock-140400615.html","article_id":"2490491390","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/ZDr3upka2TkxhA7sfmX.Dw--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/a4cef322b4244c64f8adf4e0acb07e4c"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2490491390","pubTimestamp":1733839440,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Enbridge Inc. ENB is currently considered relatively overvalued, trading at a trailing 12-month enterprise value to EBITDA  of 16.74x. This figure surpasses the broader industry average of 14.73x and is higher than other major midstream companies such as Kinder Morgan Inc. KMI and Enterprise Products Partners LP EPD, which trade at 13.95x and 10.44x EV/EBITDA, respectively. This premium valuation reflects the market’s confidence in Enbridge’s prospects.However, such a premium necessitates careful evaluation to determine whether it is supported by the company's fundamentals, growth potential and prevailing market conditions. A more detailed analysis is essential to reach a conclusion.ENB’s Resilience & Active Project Pipeline Propel Expansion. ENB is also gaining on the renewable business front. Projects like the 815 MW Sequoia Solar in Texas and the third phase of Fox Squirrel Solar demonstrate Enbridge's commitment to renewable energy grow","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU2237443382.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA USD","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","BK4561":"索罗斯持仓","EPD":"Enterprise Products Partners L.P","BK4588":"碎股","LU2237443978.SGD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc SGD-H","ENB":"安桥","LU2237443549.SGD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA SGD-H","BK4585":"ETF&股票定投概念","LU1150488135.SGD":"First Eagle Amundi Income Builder AHS-MD SGD-H","BK4144":"石油与天然气的储存和运输","BK4590":"PTP","KMI":"金德尔摩根","LU1150488218.USD":"First Eagle Amundi Income Builder AU2-MD USD","LU0238689110.USD":"贝莱德环球动力股票基金","LU2237443622.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc USD","ESG":"FlexShares STOXX US ESG Select Index Fund","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc"},"translate_title":"ENB估值溢价：该股现在是买入还是持有？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DCF":1,"ENB":1,"EPD":1,"ESG":1,"KMI":1},"content_text":"Enbridge Inc. ENB is currently considered relatively overvalued, trading at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 16.74x. This figure surpasses the broader industry average of 14.73x and is higher than other major midstream companies such as Kinder Morgan Inc. KMI and Enterprise Products Partners LP EPD, which trade at 13.95x and 10.44x EV/EBITDA, respectively. This premium valuation reflects the market’s confidence in Enbridge’s prospects.\n Image Source: Zacks Investment Research\nHowever, such a premium necessitates careful evaluation to determine whether it is supported by the company's fundamentals, growth potential and prevailing market conditions. A more detailed analysis is essential to reach a conclusion.\nENB’s Resilience & Active Project Pipeline Propel Expansion\nEnbridge is a leading midstream energy player in North America, operating an extensive crude oil and liquids transportation network spanning 18,085 miles — the world's longest and most complex system. ENB’s gas transportation pipeline network spans 71,308 miles, covering 31 U.S. states, four Canadian provinces and offshore areas in the Gulf of Mexico.\nNotably, Enbridge’s pipelines transport 20% of the total natural gas consumed in the United States. The company generates stable, fee-based revenues from these midstream assets, as they are booked by shippers on a long-term basis, minimizing commodity price volatility and volume risks.\nThe midstream energy major secures incremental cash flows from its C$27 billion backlog of secured capital projects, which include liquids pipelines, gas transmission, gas distribution and storage, and renewables. The maximum in-service date is 2029.\nENB’s Strong Dividends and Growing DCF Enhance Appeal\nEnbridge prioritizes returning capital to shareholders, as evidenced by 29 consecutive years of dividend growth, earning its status as a dividend aristocrat. Currently, ENB offers a dividend yield of 6.2%, which is higher than the 5.3% of the composite stocks in the industry. \n Image Source: Zacks Investment Research\nConsidering its substantial backlog of midstream growth projects, it is expected that Enbridge will continue to reward shareholders with attractive dividend payments. The company's distributable cash flow (DCF) for the first nine months of this year was C$8.92 billion, up from C$8.54 billion in the same period last year. This increase indicates that Enbridge is well-positioned to sustain and grow its dividend payouts.\nENB Leverages LNG and Renewables for Sustainable Growth\nEnbridge is well-positioned to capitalize on the growing global demand for LNG exports. This is because the midstream energy player’s vast pipeline network is strategically linked to more than 30% of both current and planned capacity for LNG export.\nENB is also gaining on the renewable business front. Projects like the 815 MW Sequoia Solar in Texas and the third phase of Fox Squirrel Solar demonstrate Enbridge's commitment to renewable energy growth???.\nAssessing ENB’s High Valuation\nThe positive developments have likely led to ENB’s premium valuations, as investors have high expectations for the company’s prospects and profitability. Consequently, they are willing to pay a premium for the stock, believing it will outperform its peers and the broader market in the coming months.\nHowever, there are several uncertainties regarding the stock. Enbridge, a major player in the midstream energy sector, carries a high level of debt, with a debt-to-capitalization ratio of 58.1%, exceeding the industry average of 56.1%. This situation presents considerable financial risks.\nAdditionally, Enbridge is grappling with ongoing environmental, social, and governance (ESG) challenges. Its significant dependence on oil sands, which are among the least ESG-friendly energy sources, has attracted criticism from ESG-focused investors. This scrutiny could hinder future investments and adversely impact the company’s reputation.\nAlso, a court decision has temporarily halted progress on ENB’s Rio Bravo pipeline, and the project needs to address the legal challenge before it can continue.\nThe uncertainties surrounding Enbridge are likely reflected in its price performance, as the stock has gained 29.9% in the past year, trailing the industry’s composite stocks, which have surged 42.7%.\nOne-Year Price Chart\n Image Source: Zacks Investment Research\nTherefore, while the company’s long-term outlook is strong and some investors may be willing to accept the premium, caution is warranted given the concerns associated with the stock. Instead of rushing to add ENB, carrying a Zacks Rank #3 (Hold), it may be prudent to wait for a more advantageous entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nEnterprise Products Partners L.P. (EPD) : Free Stock Analysis Report\nEnbridge Inc (ENB) : Free Stock Analysis Report\nKinder Morgan, Inc. (KMI) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2490491390"}