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The Most Important Facts About Enbridge

Enbridge logged a -1.1% change during today's afternoon session, and is now trading at a price of $32.44 per share.

Enbridge returned losses of -10.0% last year, with its stock price reaching a high of $42.12 and a low of $31.03. Over the same period, the stock underperformed the S&P 500 index by -30.0%. As of April 2023, the company's 50-day average price was $34.37. Enbridge Inc., together with its subsidiaries, operates as an energy infrastructure company. Based in Calgary, Canada, the large-cap Energy company has 11,100 full time employees. Enbridge has offered a 10.7% dividend yield over the last 12 months.

Exceptional Profitability Overshadowed by Excessive Leverage:

2018-02-02 2019-02-15 2020-02-14 2021-02-12 2022-02-11 2023-02-10
Revenue (MM) $44,378 $46,378 $50,069 $39,087 $47,071 $53,309
Gross Margins 35.0% 37.0% 38.0% 47.0% 39.0% 39.0%
Operating Margins 14% 15% 17% 20% 17% 15%
Net Margins 6.0% 6.0% 11.0% 9.0% 13.0% 6.0%
Net Income (MM) $2,859 $2,882 $5,705 $3,363 $6,189 $3,003
Net Interest Expense (MM) -$2,556 -$2,703 -$2,663 -$2,790 -$2,655 -$3,179
Depreciation & Amort. (MM) -$3,163 -$3,246 -$3,391 -$3,712 -$3,852 -$4,317
Earnings Per Share $1.25 $1.25 $2.63 $1.47 $2.87 $1.28
EPS Growth n/a 0.0% 110.4% -44.11% 95.24% -55.4%
Diluted Shares (MM) 2,020 2,020 2,021 2,023 2,026 2,020
Free Cash Flow (MM) $15,106 $13,396 $12,980 $15,136 $16,086 $16,051
Capital Expenditures (MM) -$8,448 -$2,894 -$3,582 -$5,355 -$6,830 -$4,821
Net Current Assets (MM) -$83,079 -$84,898 -$85,037 -$88,563 -$96,537 -$104,063
Long Term Debt (MM) $60,865 $60,327 $59,661 $62,819 $67,961 $72,939
Net Debt / EBITDA 6.96 6.29 5.33 5.69 6.46 6.41

Enbridge has strong margins with a stable trend, wider gross margins than its peer group, and positive EPS growth. However, the firm has a highly leveraged balance sheet. Finally, we note that Enbridge has weak revenue growth and a flat capital expenditure trend and irregular cash flows.

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

Enbridge has a trailing twelve month P/E ratio of 25.1, compared to an average of 7.54 for the Energy sector. Based on its EPS guidance of $2.02, the company has a forward P/E ratio of 17.0. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 1.5%. On this basis, the company's PEG ratio is 16.29, which suggests that it is overpriced. In contrast, the market is likely undervaluing Enbridge in terms of its equity because its P/B ratio is 1.22 while the sector average is 1.68. The company's shares are currently trading 7.9% above their Graham number.

Enbridge Has an Average Rating of Buy:

The 7 analysts following Enbridge have set target prices ranging from $38.28 to $47.11 per share, for an average of $42.33 with a buy rating. As of April 2023, the company is trading -18.8% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

Enbridge has a very low short interest because 1.9% of the company's shares are sold short. Institutions own 53.7% of the company's shares, and the insider ownership rate stands at 0.16%, suggesting a small amount of insider investors. The largest shareholder is Royal Bank of Canada, whose 7% stake in the company is worth $4,873,043,166.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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