Enbridge Raises Dividend and EPS, Announces Restructuring - Analyst Blog

Enbridge Inc. (ENB) announced a 33% increase in its quarterly common share dividend as along with a Canadian restructuring plan and the corresponding new dividend payout policy range. The company also announced 2015 adjusted earnings per share guidance of C$2.05 to C$2.35.

The Canada-based company raised its quarterly common share dividend by 33% to 46.5 cents per share. The dividend is payable on Mar 1, 2015 to shareholders of record on Feb 16.

In terms of restructuring, Enbridge plans to transfer its Canadian Liquids Pipelines business – comprising Enbridge Pipelines Inc., Enbridge Pipelines Inc. and certain renewable energy assets – to its Canadian affiliate, Enbridge Income Fund.

Enbridge's board of directors has approved a revised dividend payout policy range of 75% to 85% of adjusted earnings. The previous payout policy range was 60% to 70%.

Finally, Enbridge also announced that it is reviewing a potential restructuring plan which would involve the transfer of its directly held U.S. liquids pipeline assets to Enbridge Energy Partners, L.P. (EEP), a U.S. affiliate of Enbridge.

Enbridge Inc. is a leading energy transporter and distributor company. As a transporter, Enbridge operates the world's longest crude oil and liquids pipeline system in Canada and the U.S. The company is also involved in natural gas transmission and midstream businesses in other countries. As a distributor, Enbridge owns and operates Canada's largest natural gas distribution company. It provides distribution services in Ontario, Quebec, New Brunswick and New York.

However, we remain apprehensive about the company's midstream natural gas business, which is sensitive to changes in natural gas supply-demand fundamentals and commodity cycles associated with gas processing margins.

Enbridge currently carries a Zacks Rank #4 (Sell). Better-ranked players in the energy sector include Cheniere Energy Partners LP. (CQP) and Sandridge Mississippian Trust II (SDR). All these stocks sport a Zacks Rank #1 (Strong Buy).