What’s your view on Enbridge given its current lower share price and higher dividend yield ?

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My primary goal is for dividend income.
Also wondering if you have had any thoughts about putting together a model portfolio for generating primarily dividends?
Thanks in advance for your insight!

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Asked on November 5, 2023 3:41 am
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Private answer

Hey there,

Enbridge is on 'thin' ice when it comes to the dividend. The company has a high debt load which is the primary reason why its stock has struggled this year. That said, the company did recently re-iterate DCF guidance - which is key to maintaining the dividend. The company is in the process of acquiring Dominion Utilities which is a $12.8B dollar deal. It has pre-funded $8.3B of it and will have to use multiple levers to fund the rest. The key, is that the company needs to stay below its pro-forma targeted debt ratio of 4.75 debt/EBITDA.

If it can keep debt in check and achieve 5% DCF targets then the dividend should be fine. That said, the company doesn't have a lot of wiggle room here. I'd say be cautious and stay on top of the company. Of note, I own it and am keeping it.

As for the model portfolio, we do have three different income portfolios: Dividend Growth, All-Canadian Hybrid and High Yield which you can find here: https://www.stocktrades.ca/stocktrades-premium/income-model-portfolios/

Regards,

Mat

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Posted by Mathieu Litalien
Answered on November 7, 2023 6:05 am
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Hey Matt, thank you for your insight on Enbridge and the income model portfolios! Keep up with the Good Work at Stocktrades.ca 😄 Rick
(Rick Reeves at November 8, 2023 3:09 am)