Here's Why Hold Strategy is Apt for Enbridge (ENB) Stock Now
Enbridge Inc. ENB has witnessed upward earnings estimate revisions for 2023 and 2024, respectively, in the past 30 days.
Factors Favoring the Stock
Currently carrying a Zacks Rank #3 (Hold), Enbridge has an extensive network of pipeline assets responsible for transporting roughly 30% of North American crude oil production. The midstream properties are also responsible for carrying as much as 20% of the natural gas Americans consume. Through its Gas Distribution and Storage operations, Enbridge has delivered roughly 2 trillion cubic feet of natural gas, thereby serving 75% of Ontarians.
With a significant portion of its assets being contracted by shippers for the long term, its business model is less exposed to volatility in oil and gas prices. Underpinned by long-term contracts, Enbridge’s business model has considerably lower volume risk exposure.
ENB has estimated roughly C$18 billion in secured growth capital projects. Thus, the company is ensuring more cashflows in the coming years.
Risks
Compared to composite stocks belonging to the industry, Enbridge’s balance sheet has more debt exposure. Moreover, the leading midstream energy player’s bottom line is affected by increasing gas distribution costs.
Stocks to Consider
Better-ranked players in the energy space include Halliburton Company HAL, PBF Energy PBF and Antero Midstream Corporation AM. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Halliburton is well known for providing products and services to energy companies. Over the past 30 days, HAL has witnessed upward earnings estimate revisions for 2023 and 2024.
PBF Energy is a leading independent refiner in North America. PBF has lower exposure to debt capital than composite stocks belonging to the industry.
Antero Midstream generates stable cashflows, banking on its midstream assets involved in gathering, compression, processing and fractionation activities. The properties are centered around the prolific Appalachian Basin. Over the past 30 days, Antero Midstream has witnessed upward earnings estimate revisions for 2023.
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Halliburton Company (HAL) : Free Stock Analysis Report
Antero Midstream Corporation (AM) : Free Stock Analysis Report
Enbridge Inc (ENB) : Free Stock Analysis Report
PBF Energy Inc. (PBF) : Free Stock Analysis Report
