Enbridge: An Aristocrat but What Do the Charts Show?
A lot of people are owners (via stocks, etfs or mutual funds) of Enbridge in someway because of the companies strong consistency in increasing their dividends overtime and the companies ability to retain a decent balance sheet even in market corrections and recessions, however, what do charts show?
For retirees, its hard to discount Enbridge, as their yields have remained elevated for quite some time, thus in that sense, the company remains attractive.
However, technically, its difficult for a more typical investor to remain bullish on Enbridge, particularly as a fragile global economy will keep crude suppressed (even though Enbridge has a more diversified portfolio, crude price is still crucial).
Moreover, on a daily, weekly and monthly level, it seems the stock lacks the momentum to break out of a trend-line that was "created" back in 2015. I expect the stock to meander somewhat around the $48-51.00 range despite a strong and recent earnings report. Where it goes at the end critical point at the bottom of the trend-line will be based on the global economy, the Canadian economy and the price of natural gas and crude.
Another reason I am not a fan of Enbridge is the large amount of outstanding shares - this goes for any company, not just Enbridge. The higher the outstanding shares, the higher the shareholder dilution, the lower the EPS and typically this means it takes considerably more momentum for the stock to grow overtime, and in a correction, downtrends can be violent.
For retirees, a much safer bet is investing in renewable energy such as Brookfield Renewables LP.
However, for those who still want exposure to the oil transportation sector, TC Energy (TRP) and Enbridge (ENB) are certainly superior to American counterparts.
- zSplit
For retirees, its hard to discount Enbridge, as their yields have remained elevated for quite some time, thus in that sense, the company remains attractive.
However, technically, its difficult for a more typical investor to remain bullish on Enbridge, particularly as a fragile global economy will keep crude suppressed (even though Enbridge has a more diversified portfolio, crude price is still crucial).
Moreover, on a daily, weekly and monthly level, it seems the stock lacks the momentum to break out of a trend-line that was "created" back in 2015. I expect the stock to meander somewhat around the $48-51.00 range despite a strong and recent earnings report. Where it goes at the end critical point at the bottom of the trend-line will be based on the global economy, the Canadian economy and the price of natural gas and crude.
Another reason I am not a fan of Enbridge is the large amount of outstanding shares - this goes for any company, not just Enbridge. The higher the outstanding shares, the higher the shareholder dilution, the lower the EPS and typically this means it takes considerably more momentum for the stock to grow overtime, and in a correction, downtrends can be violent.
For retirees, a much safer bet is investing in renewable energy such as Brookfield Renewables LP.
However, for those who still want exposure to the oil transportation sector, TC Energy (TRP) and Enbridge (ENB) are certainly superior to American counterparts.
- zSplit
Anything can happen with any commodity, but I expect oil/energy to be one of the top performing sectors in 2020.