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My thesis
Energy midstream appears to be an interesting domain to invest in as there are several large players paying generous dividends. With its $85 billion market cap Enbridge (NYSE:ENB) is by far the largest North American
Enbridge: Strong Dividend Yield Is Offset By Overvaluation
Summary
- Enbridge is a fundamentally strong company offering a compelling dividend yield, which appears to be safe.
- On the other hand, the dividend discount model suggests the stock is slightly overvalued, which diminishes the appeal of ENB's attractive dividend yield.
- I will consider buying ENB if it drops below $35.
As an investor who started my path five years ago with my own capital, I represent a blend of hands on experience and academic background in corporate finance. Due to my relatively young age I thrive on discovering long-duration growth opportunities and actively seek out opportunities that align with my risk-taker mindset. In addition to my appetite for growth, I also understand the importance of balancing the portfolio with low-volatility dividend-playing names to be a well-rounded investor. In my analysis I prefer to rely on fundamentals with the business and strategic perspectives the most important in my opinion. As a person with the financial background I also pay attention on a company's financial performance and how intrinsic value of the stock looks compared to its price in real life. This does not mean that I am seeking deep discounts, but what I am looking is high-quality names with reasonable valuations. My experience as an investor taught me that if something is excessively cheap there are potentially numerous reasons for it and it is better to stay away from deep discounts. I invite readers to subscribe and follow my analysis because I am focusing on high-quality names, which does not necessarily mean only well-known companies but also potential new stars capable of delivering exponential share price growth over the long distance.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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