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Enbridge Inc. (ENB $65.40)
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TC Energy Corporation (TRP $70.38)
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Pembina Pipeline Corporation (PPL $53.06)
Q: Hi Peter
I owned all 3 pipelines ENB, PPL, and TRP for dividends and slow capital appreciation;
all 3 have been declining in the last few weeks
are there any fundamental reasons ? I know that the prices of oil is weak and there are obstacles to try to build a pipeline from Alberta to BC , some talks for pipeline to the USA, I am looking for opportunity to add to my existing position, should I wait longer? is there a seasonal trade timing? Thanks
Michael
I owned all 3 pipelines ENB, PPL, and TRP for dividends and slow capital appreciation;
all 3 have been declining in the last few weeks
are there any fundamental reasons ? I know that the prices of oil is weak and there are obstacles to try to build a pipeline from Alberta to BC , some talks for pipeline to the USA, I am looking for opportunity to add to my existing position, should I wait longer? is there a seasonal trade timing? Thanks
Michael
5i Research Answer:
All three companies are solid names for investors seeking stable dividends, with slow and steady growth over time. It is correct that weak commodity prices are a reason for the underperformance of these three companies. In addition, the weakness in share prices was partially due to a sentiment shift against defensive names as a whole.
Most companies with defensive characteristics of slow but predictable growth have been under significant pressure recently. We think this is temporary and may not have much to do with fundamentals or company specific issues. We believe all three offer good value here.