Enbridge Inc. ENB announced the approval of its Normal Course Issuer Bid (“NCIB”) by the Toronto Stock Exchange (“TSX”) to purchase as much as 31 million common shares to an aggregate amount of C$1.5 billion.
Per the terms of the NCIB, Enbridge will be allowed to purchase for cancellation through the facilities of the TSX, the New York Stock Exchange (“NYSE”) as well as other designated exchanges and alternative trading systems.
Starting from Jan 5, 2022, the company will purchase the shares over a one-year period. The number of shares authorized for purchase represents 1.5% of the company’s common shares issued and outstanding. Enbridge will limit daily purchases on the TSX under the NCIB to a maximum of 1,929,706 common shares, which is 25% of the average daily trading volume of the common shares.
Enbridge has a strong commitment toward returning capital to shareholders. Last month, ENB raised its quarterly dividend by 3% to 86 Canadian cents per share. Thus, it has increased its 2022 dividend (C$3.44 annualized), marking a dividend increase for 27 straight years.
In a separate transaction, Enbridge, through its subsidiary, closed the divestment of its minority stake in Noverco Inc. to Trencap L.P. for a cash consideration of $1.14 billion. Enbridge had a 38.9% ownership interest in gas distributor Noverco. Trencap, a consortium led by Caisse de dépôt et placement du Québec, now owns 100% of Noverco stake.
The divestment will improve Enbridge’s financial flexibility. The proceeds from the asset sale will be used to clear debt and support its secured capital program.
Company Profile & Price Performance
Headquartered in Calgary, Alberta, Enbridge is a leading energy infrastructure company.
Shares of Enbridge have outperformed the industry in the past six months. The stock has lost 0.4% compared with the industry’s 4.1% decline.
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Zacks Rank & Stocks to Consider
Enbridge currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following stocks that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA Inc. MUSA, based in El Dorado, AR, is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA’s unique high-volume, low-cost business model helps it retain high profitability even in the fiercely competitive retail environment.
In the past year, shares of Murphy USA have increased 56.6% compared with the industry’s growth of 28.8%. MUSA currently holds a Zacks Style Score of A for Growth and B for Value. MUSA is committed to returning excess cash to shareholders through continued share buyback programs. As part of this initiative, the fuel retailer recently approved a new repurchase authorization of up to $1 billion, which will commence once the existing $500-million authorization expires and be completed by Dec 31, 2026. The move underscores MUSA’s sound financial position and commitment to reward shareholders.
Canadian Natural Resources Limited CNQ is one of the largest independent energy companies in Canada. CNQ has a broad portfolio of low-risk exploration and development projects, with a strong international exposure that yields long-term volume growth at above-average rates. As of 2020-end, CNQ had 12.106 billion oil-equivalent barrels (BOE) in its total proved reserves.
In the past six months, shares of Canadian Natural Resources have increased 65.6% compared with the industry’s growth of 64.7%. CNQ currently has a Zacks Style Score of B for Growth. The company raised its dividend by 25% in November, reflecting strength in its cash flows. CNQ is counted as a ‘Canadian Dividend Aristocrat’ with an attractive yield. Canadian Natural Resources has a solid track record of dividend hikes, increasing its payout for 22 consecutive years.
TotalEnergies SE TTE has one of the best production growth profiles among the oil super majors, characterized by an upstream portfolio, with above industry-average exposure to the faster-growing hydrocarbon-producing regions of the world. TTE is making regular investments to expand the renewable operation and strives to achieve net-zero emission by 2050.
In the past year, shares of TotalEnergies have increased 23% compared with the industry’s growth of 15.6%. TTE currently sports a Zacks Style Score of A for Value and B for Growth. TotalEnergies manages long-term debt quite efficiently and tries to maintain the same at manageable levels. Its debt to capital has been declining in the past few years.
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