Estimates have been rising for Enbridge Inc. (ENB) after the company reached a 10-year agreement with shippers for its crude oil mainline system.
The Canadian-based company operates the largest crude oil and liquids pipeline system in the world and is a leader in natural gas distribution.
The company also recently raised its dividend by 15%. It currently yields 3.1%.
Estimates Rising
Despite an earnings miss in Q4, analysts have been raising their estimates consistently over the last several months, as seen in its Price & Consensus chart:
Management expects to earn between $2.75 and $2.95 per share in 2011. The Zacks Consensus Estimate is within guidance at $2.88. This represents 9% EPS growth over 2010.
The 2012 consensus estimate is currently $3.11, also representing an 8% annual increase. It is a Zacks #2 Rank (Buy) stock.
Dividend Rising
Enbridge recently raised its quarterly dividend by 15% to $0.49 per share. It currently yields 3.1%.
Over the last 10 years, the company has raised its dividend at an average annual rate of 11%.
The company believes it can grow free cash flow at 18% per year over the next several years which would allow the company to continue raising its dividend.
Fourth Quarter Results
Enbridge reported its results for the fourth quarter of 2010 on February 3. Earnings per share came in at 63 cents, missing the Zacks Consensus Estimate by 5 cents.
Revenues surged 30% year-over-year to $4.143 billion. Gas pipelines, processing and energy services, which accounted for more than two-thirds of total revenue, jumped 43%.
Meanwhile, operating income surged 32% year-over-year.
Shares are trading at 21.7x forward earnings, a slight premium to the industry average of 20.4x.
Over the last 10 years, ENB has traded at a median forward P/E of 18.6x.
Read the December 13 article here.
This Week’s Growth & Income Zacks Rank Buy Stocks:
Marsh & McLennan Companies, Inc. (MMC) offers investors both growth and income. The stock yields an attractive 2.9%, and analysts project 13% EPS growth in 2011 and 14% growth in 2012. Read the full article.
Quality Systems, Inc. (QSII) stands to benefit from healthcare organizations migrating to electronic health records (EHR), and from a $20 billion “nudge” from the federal government through The American Recovery and Reinvestment Act to accelerate this pace. Read the full article.
A.O. Smith Corp (AOS) announced in December 2010 that it was selling its Electrical Products segment to focus more on growing its water heating and water treatment businesses in fast-growing markets, such as China. The move may just pay off, given that analysts expect 18% EPS growth from the company over the next two years. Read the full article.
Senior Housing Properties Trust (SNH) pays a dividend that yields an attractive 6.3%. Estimates have been rising for SNH since it posted strong Q4 results in late February. Focusing on stable industries has allowed SNH to pay a consistent quarterly dividend over the last decade. Read the full article.
Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.
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