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Zacks' 7 Best Strong Buy Stocks (New Research Report)
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Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
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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 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 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, 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. Backed by long-term contracts, Enbridge’s business model has considerably lower volume risk exposure.
ENB has estimated roughly C$19 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 Kinder Morgan, Inc. (KMI - Free Report) , Profire Energy, Inc. (PFIE - Free Report) and Helix Energy Solutions Group, Inc. (HLX - Free Report) . While Kinder Morgan and Profire Energy carry a Zacks Rank #2 (Buy), Helix Energy sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
With its operating interests in oil and gas pipeline networks spread across 83,000 miles, Kinder Morgan is a leading energy infrastructure company in North America. It derives most of its earnings from take-or-pay contracts, generating stable fee-based revenues.
Profire Energy is mainly focused on the oil and gas industry’s upstream, midstream and downstream transmission segments. PFIE has boasted that its legacy business is doing extremely well, thanks to the resumption of maintenance work of exploration and production players.
Helix Energy is a leading player and is well-poised to grow in the favorable crude pricing environment since it primarily provides specialty services to the offshore energy industry.