The Canadian energy sector certainly has a multitude of serious headwinds to battle today. Many of these could continue to rage on for quite some time.
The uncertainty of oil and gas prices combined with weak global supply and demand factors has led many investors who previously held specific energy names as part of their core portfolio to avoid the sector entirely. In this article, I’m going to discuss one company which still holds value in this sector.
Enbridge Inc. (TSX:ENB)(NYSE:ENB) is an energy infrastructure company with one of the best value propositions of any Canadian energy company today. The pipeline operator has continued to work on its Line 3 expansion which most analysts expect to be finished by early 2021, despite continued setbacks from regulators in the U.S. that have tried to slow down the production of this extension.
The company’s existing pipeline network is among the most valuable in North America on a stand-alone asset basis, and this Line 3 extension furthers this investment thesis.
Additionally, the balance sheet improvement made by Enbridge’s management team in recent years has insulated the company from market forces to a significant degree.
Though the pipeline player does have a significant amount of debt on its books, the stable cash flow generation Enbridge will create overtime will more than offset payments on its current debt load.
Invest wisely, my friends.