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Sunoco LP (SUN) - free report >>
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Sunoco LP (SUN) - free report >>
Enbridge Inc (ENB) - free report >>
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Here's Why Hold Strategy is Apt for Enbridge (ENB) Stock Now
Enbridge Inc. (ENB - Free Report) has witnessed upward earnings estimate revisions for 2023 and 2024, respectively, in the past seven 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$17 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 Murphy USA Inc. (MUSA - Free Report) , Sunoco LP (SUN - Free Report) and Cactus, Inc. (WHD - Free Report) . While Murphy USA carries a Zacks Rank #2 (Buy), Sunoco and Cactus sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is a leading retailer of gasoline. MUSA has more than 1,700 stores and has witnessed upward earnings estimate revisions for 2023 earnings in the past seven days.
Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model. For this year, SUN has witnessed upward earnings estimate revisions in the past seven days.
Cactus has been aiding its clients in fast-tracking their well drilling and completion activities. The company has also been enabling lower operator emissions per barrel of production. Thus, there has been a significantly lower carbon intensity per well.