Q: Hi,
Lets say Enbridge does what a few analysts are thinking and drops from its current 40ish to 33ish. Does this really have an effect on anything besides presenting a great long term buying opportunity? If dividends are covered by cash flow, and cash flow is under contract, does a lower share price change anything besides market cap? What other consequences do you forsee there? Im thinking about buying in now (I have many years to sit on it, so short term drops dont bother me), then watching it and averaging down if the opportunity presents itself. Since dividends are covered almost 3 to 1 by cash flow, even if the share price drops to 33, could they still not afford to continue raising the dividend to encourage more buying and therefore help re raise the share price? Maybe Im oversimplifying this, thanks.
Lets say Enbridge does what a few analysts are thinking and drops from its current 40ish to 33ish. Does this really have an effect on anything besides presenting a great long term buying opportunity? If dividends are covered by cash flow, and cash flow is under contract, does a lower share price change anything besides market cap? What other consequences do you forsee there? Im thinking about buying in now (I have many years to sit on it, so short term drops dont bother me), then watching it and averaging down if the opportunity presents itself. Since dividends are covered almost 3 to 1 by cash flow, even if the share price drops to 33, could they still not afford to continue raising the dividend to encourage more buying and therefore help re raise the share price? Maybe Im oversimplifying this, thanks.
