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Stock Strategist

Regulation Works in Enbridge's Favor

This wide-moat firm offers a diversified business model with growth prospects and a reasonable dividend yield.

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Although  Enbridge's (ENB) second-quarter results missed our estimates, we remain confident in the company's ability to execute on its growth projects and think the shares are trading well below what they are worth.

Enbridge is one of a handful of experienced midstream companies with the expertise, scale, access to capital, and geographic reach to successfully expand its pipeline transportation business. It has the capability to do this through the simultaneous execution of multiple projects, spanning several jurisdictions. This includes a portfolio of opportunities that are developing from the explosive growth in liquids in Alberta's oil sands, the Bakken, and overall volume growth flowing into the major oil hub of Cushing, Okla. In addition to its liquids opportunities are growth opportunities in its natural gas, distribution, and electricity business units.

David McColl does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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