Enbridge Long -Term Contracts AND Enbridge vs Fortis for Dividend Investors

0
0

Is there a document somewhere that tells when Enbridge’s long-term contracts are up? (I have been going back and forth on buying into this company because my gut recoils with anything to do with oil or gas, but everything I read and listen to says because it is a transporter, that it is safe.)

Also, I am investing in dividend stock for retirement income. If you were a dividend investor with this focus and had enough cash right now to buy either Enbridge or Fortis, which would you pick and why? (I realize these companies serve different purposes, but would like to hear your long-term thoughts if safety and dividend returns were your goals.) I’m thinking of buying Enbridge now and saving to buy Fortis later for the growth aspect. Thanks in advance!

Marked as spam
Asked on September 14, 2020 6:58 am
2 views
0
Private answer

I laughed when I read your response because I actually almost wrote, "If someone held a gun to your head and made you choose" when I drafted those questions this morning because I could just see the stock philosopher in you not wanting to answer a Monday morning question that made you choose between these two beloveds! I'm not sure if you like hearing what folks do after you give them a chat, so I'll tell you that I did pull the trigger on ENB today because of the yield and it's wicked sale price. Fortis has stayed around the same price point for about two months bopping between $51 something and $54. It's not as far off it's COVID high compared to Enbridge, so I did it based on your high regard for both of them and the math. Thanks for quick the response!

Marked as spam
Posted by Denise LeBelle
Answered on September 14, 2020 8:02 pm
0
Private answer

Hmmm. The length of individual contracts would indeed be difficult to look up. However, you'll find information within their quarterly or annual reports (more than likely annual for that type of information, in detail at least.) Or, simply e-mail the company and request the information. I'm sure they'd oblige. Maybe not with EVERY contract, but the major ones at least.

It's funny, because both Enbridge and Fortis are two of my longest holdings. They are companies that I deem so solid inside of my portfolio that I don't even look at the quarterlies. They simply run in the background, compounding income for me. This should give you an indication of how safe I feel these companies are. In fact, as I'm writing this right now, I've opened up Enbridge's second quarter results for the first time in quite a while, and I'm liking what I'm seeing.

If you look at producers like Suncor and CNRL, who's income collapsed, it should become apparent that pipelines are not as reliant on the price of oil. Enbridges reported EPS in the second quarter of $0.82, compared to $0.86 in 2019 and cash from operating activities was $2.416 billion compared to $2.494 billion in 2019. Keep in mind, this was a quarter that came during the peak of the pandemic.

It's hard for me to pick a single stock out of these two. If you're looking at income, Enbridge's huge yield has to come into play. However, I feel that Fortis's dividend is much safer. Keep in mind I wouldn't put either of these dividends in the high-risk category. It's just if someone put a gun to my head and made me answer who would be at a bigger risk of being cut, it would be Enbridge.

Both of these companies are going to benefit immensely from lower interest rates. Their cost of borrowing will go down, and they will be able to expand for cheaper.

Personally, if I were to pick one for both safety and dividend returns, I'd pick Fortis. Just because I feel a second wave or more travel delays could make Enbridge's share price very rocky.

Marked as spam
Posted by Dan Kent
Answered on September 14, 2020 8:23 am