Stock to avoid today: Enbridge Inc (USA)(NYSE: ENB)

Enbridge Inc (USA)(NYSE: ENB) opened subdued this morning (fell 1.2% as of 10:25AM EST Feb 17th, 2017; Source: Google finance) after the group reported a lower adjusted earnings per share of 56 cents in the fourth quarter 2016 ended 31st December, which missed the analysts’ estimates for the adjusted earnings per share of 58 cents. But, the company had reported the adjusted revenue growth of 5 percent to C$9.34 billion in the fourth quarter 2016, beating the analysts’ estimates for revenue of C$9.31 billion.

ENB has bought a 49.9 per cent stake in EnBW’s 1.8 billion euro (US$1.9 billion) North Sea offshore park Hohe See. With a planned capacity of about 500 megawatts (MW), Hohe See is one of Europe’s largest offshore wind park projects and will be EnBW’s biggest park to date. The group has target to increase the share of renewables in its generation mix to more than 40 percent by 2020 from 19 percent in 2012. The company has already funded its investment through financing moves in the fourth quarter of last year, primarily through the preferred share and hybrid instrument offerings. ENB has acquired 49.9 percent of the shares in Hohe See, while EnBW will retain the remaining 50.1 percent of the shares.

Additionally, the Federal Trade Commission has approved for a $28-billion merger of ENB and Spectra Energy Corp. with conditions, which will create the largest North American energy infrastructure company. ENB’s pipelines mainly send Canadian crude from oil sands to refiners on the U.S. Gulf Coast, while Spectra’s network ships natural gas to the U.S. East Coast. Furthermore, ENB owns the Walker Ridge Pipeline while Spectra has an indirect stake in the competing Discovery Pipeline through its interest in DCP Midstream. Once the deal is completed, the merger would give ENB ownership interests in the two closest pipelines in parts of the Gulf of Mexico. The transaction is expected to close in the first quarter of this year.

ENB has continued to successfully execute its growth capital program, bringing $2 billion of projects into service during 2016.

ENB has declared the quarterly common share dividend of $0.583 per common share, payable on March 1st, 2017, which is a 10% increase over the prior quarterly rate.

Meanwhile, ENB and Enbridge Energy Partners, L.P. has announced that the previously disclosed transaction to acquire an effective 27.6 percent interest in the Bakken Pipeline System (Bakken Pipeline or the System) has closed as final conditions have now been met.

ENB stock has risen 32.53% in a year (source: Google Finance).

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