Enbridge Raises Quarterly Dividend by 3%

Enbridge (ENB), North America’s largest energy infrastructure company, announced a dividend hike on Tuesday.

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The company also provided financial guidance for 2022, and an update on its strategic priorities. (See Analysts’ Top Stocks on TipRanks)

Dividend Hike

Enbridge’s board of directors declared a quarterly dividend of C$0.86 per common share, payable on March 1, 2022, to shareholders of record on February 15, 2022.

The declared dividend represents a 3% increase over the previous quarterly rate. It’s the 27th consecutive year in which the company has increased its dividend on common shares.

Enbridge also announced its intention to repurchase up to C$1.5 billion of its shares.

Financial Guidance

Enbridge reaffirmed its 2021 forecast range for adjusted EBITDA of C$13.9 billion to C$14.3 billion, and distributable cash flow (DCF) per share of C$4.70 to C$5.

It announced 2022 financial guidance for EBITDA of C$15 billion to 15.6 billion and DCF per share of C$5.20 to C$5.50, reflecting median growth of 9% and 10% respectively, compared to the forecast from 2021.

Update on Strategic Priorities

The priorities of Enbridge’s 2022 strategic plan continue to strengthen the resilience, longevity and organic growth potential of its cash flows over the long term.

The priorities of Enbridge’s three-year plan include ensuring safe and reliable operations while providing cost effective transportation solutions to Enbridge customers, and maintaining the solid balance sheet and financial flexibility of the sector.

Management Commentary

Enbridge president and CEO Al Monaco said, “One of our mantra’s at Enbridge is the disciplined deployment and allocation of capital. Looking forward to our 3-year planning horizon, we expect to have C$5-6 billion of annual investment capacity, of which $3-4 billion is prioritized to core low capital intensity and utility-like investments. The remaining C$2 billion will be deployed to the next best alternatives and benchmarked against share repurchases.

“Our organic growth will be focused on enhancing existing asset returns, modernizing our assets, and low capital intensity opportunities within our conventional businesses to serve growing domestic and export market demand. We also plan to continue to invest in low-carbon opportunities that leverage our existing assets and provide a platform for future growth.”

Wall Street’s Take

Last month, National Bank Financial analyst Patrick Kenny maintained a Buy rating on ENB with a C$54 price target. This implies 10% upside potential.

Overall, ENB scores a Strong Buy consensus rating among analysts based on 11 Buys and three Holds. The average Enbridge price target of C$57.82 implies 17.8% upside potential to current levels.

TipRanks’ Smart Score

Enbridge scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.