Rating Change #9
Enbridge Inc (ENB) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income and weak operating cash flow.
Highlights from the ratings report include:
- Compared to its closing price of one year ago, ENB's share price has jumped by 25.31%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- ENBRIDGE INC's earnings per share declined by 34.6% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ENBRIDGE INC increased its bottom line by earning $1.31 versus $1.29 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 31.1% when compared to the same quarter one year ago, falling from $395.00 million to $272.00 million.
- Net operating cash flow has decreased to $648.00 million or 32.28% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Enbridge Inc. engages in the transportation and distribution of crude oil and natural gas primarily in Canada and the United States. The company's Liquids Pipelines segment operates common carrier and contract crude oil, natural gas liquids (NGLs), and refined products pipelines and terminals. The company has a P/E ratio of 31.3, above the average energy industry P/E ratio of 31.2 and above the S&P 500 P/E ratio of 17.7. Enbridge has a market cap of $31.2 billion and is part of the basic materials sector and energy industry. Shares are up 6.1% year to date as of the close of trading on Thursday.You can view the full Enbridge Ratings Report or get investment ideas from our investment research center.
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