Enbridge stock has been experiencing fluctuations in its price and has been a topic of discussion among investors. Here are some reasons why:
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Dominion Deal: Enbridge recently acquired Dominions gas utility assets, which made it North Americas largest natural gas utility franchise. However, investors were not impressed with the price Enbridge paid for the acquisition, and the stock fell to a two-year low.
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Debt Load: Enbridge has a significant amount of debt, which has raised concerns among investors. The companys debt load has been increasing due to acquisitions and high-cost issuance.
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Oil and Gas Industry: Enbridges business model is based on oil and natural gas, which goes against Canadas emission-reduction targets. This makes buying Enbridge stock a bet on the sustained relevance of oil and gas.
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Interest Rates: Higher interest rates have been a headwind for Enbridge stock.
Despite these concerns, Enbridge is still considered a good business to invest in, and it has a high dividend yield of over 7%. However, investors should be aware of the risks associated with the companys debt load and its focus on oil and gas.
