Enbridge may be overvalued with poor growth indicators, but the 7 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $40.09 to $47.38 per share, for an average of $43.45. At today's price of $36.73, Enbridge is trading -15.47% away from its average target price, suggesting there is an analyst consensus of some upside potential.
Enbridge Inc. is an energy infrastructure company. The large-cap Energy company is based in Calgary, AB. Enbridge has offered a 7.0% dividend yield over the last 12 months.
Enbridge has a trailing twelve month P/E ratio of 39.92, compared to an average of 7.54 for the Energy sector. Based on its EPS guidance of 2.19, the company has a forward P/E ratio of 16.77. Based on the 27.4% average annual growth rate of Enbridge's historical and projected earnings per share, the company's PEG ratio is 1.46. This EPS growth rate is likely not sustainable, so will substitute the broader market's 5-year projected EPS growth rate of 13.05%, which gives us a PEG ratio of 3.06. This suggests that these shares are overvalued.
Furthermore, Enbridge is likely overvalued compared to its book value, since its P/B ratio of 1.889 is higher than the sector average of 1.68. The company's shares are currently trading 4.61% above their Graham number, implying that they are overvalued in terms of earnings and book value.
If analysts are giving the the company a decent rating despite its hefty price point, it could be related to its strong cash flows and high dividend. Enbridge's decent EPS growth rate of 22.25% is another positive point. We note, however, that the expected growth rate implied by its P/E ratio is significantly higher, at 40.0%.
2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
---|---|---|---|---|
Revenue (MM) | $50,069 | $39,087 | $47,071 | $53,309 |
Revenue Growth | n/a | -21.93% | 20.43% | 13.25% |
Gross Margins | 38.08% | 47.12% | 39.02% | 38.87% |
Gross Margins Growth | n/a | 23.74% | -17.19% | -0.38% |
Operating Margins | 16.5% | 20.36% | 16.58% | 9.71% |
Operating Margins Growth | n/a | 23.39% | -18.57% | -41.44% |
Net Margins | 11.39% | 8.6% | 13.15% | 5.63% |
Net Margins Growth | n/a | -24.5% | 52.91% | -57.19% |
Earnings Per Share | $2.82 | $1.66 | $3.05 | $1.48 |
EPS Growth | n/a | -41.13% | 83.73% | -51.48% |
Diluted Shares (MM) | 2,025 | 2,026 | 2,026 | 2,025 |
Free Cash Flow (MM) | $3,706 | $4,161 | $1,163 | $6,409 |
FCF Growth | n/a | 12.28% | -72.05% | 451.07% |
Capital Expenditures (MM) | $5,692 | $5,620 | $8,093 | $4,821 |
Net Debt / EBITDA | 6.15 | 9.14 | 7.07 | 9.66 |