No DEBT being considered at all on this valuation? I own ENB by the way. But their large debt should not be ignored, with higher interest rates, servicing debt gets more expensive and it has to be passed to the customers sooner or later. Also add that costs for newer pipelines are getting higher and higher, TMX extensions costs have already doubled iirc. As nat. gas production out of WCSB grows steadily in the next years both will be able to increase revenues steadily and both are great picks for stable and long term though,
Their business models require relatively high debt compared to other industries. Recent interest rate increases explain why their 2023 guidance for EBITDA growth > DCF/share growth, and why dividends only increase by 3%.
Perpetuity - is a bit long for a humble human being... I may be terribly wrong but when I discount it's dividend's growth on 12 years basis - I'm getting PV of just $37 so I'm passing.
Make sure your PV includes the PV of the terminal value and not just the dividend stream. Assuming perpuity simply puts a value on the post-12 year period and PV is useless unless you include some terminal value if your are not assuming perpetuity. There is no analysis I can do that arrives at a $37 value with 3% annual dividend increases even for only 12 years. Help me out.
Forgot to mention that I own TRP and ENB. Also PPL and KMP. I used to own EP and PAA but was unclear as to US tax implications so sold these. If anyone has information on US tax implications of limited partnerships, it would be great to see that.
Thanks. Impressed by how much work you’re able to produce!
I am old enough to remember when TRP cut its dividend, and the stock went into freefall. That was the best time to buy. It be interesting to know what the value would be if the companies didn’t increase their dividend for two or three years, and then went back to their usual dividend increases.
No DEBT being considered at all on this valuation? I own ENB by the way. But their large debt should not be ignored, with higher interest rates, servicing debt gets more expensive and it has to be passed to the customers sooner or later. Also add that costs for newer pipelines are getting higher and higher, TMX extensions costs have already doubled iirc. As nat. gas production out of WCSB grows steadily in the next years both will be able to increase revenues steadily and both are great picks for stable and long term though,
Their business models require relatively high debt compared to other industries. Recent interest rate increases explain why their 2023 guidance for EBITDA growth > DCF/share growth, and why dividends only increase by 3%.
What do you think of the new TC spinoff - South Bow? Is it worth loading up?
Perpetuity - is a bit long for a humble human being... I may be terribly wrong but when I discount it's dividend's growth on 12 years basis - I'm getting PV of just $37 so I'm passing.
Make sure your PV includes the PV of the terminal value and not just the dividend stream. Assuming perpuity simply puts a value on the post-12 year period and PV is useless unless you include some terminal value if your are not assuming perpetuity. There is no analysis I can do that arrives at a $37 value with 3% annual dividend increases even for only 12 years. Help me out.
You are right
Forgot to mention that I own TRP and ENB. Also PPL and KMP. I used to own EP and PAA but was unclear as to US tax implications so sold these. If anyone has information on US tax implications of limited partnerships, it would be great to see that.
Thanks. Impressed by how much work you’re able to produce!
I am old enough to remember when TRP cut its dividend, and the stock went into freefall. That was the best time to buy. It be interesting to know what the value would be if the companies didn’t increase their dividend for two or three years, and then went back to their usual dividend increases.
Pipelines are boring, bond-like and sometimes frustrating, but when the market tanks & the dividends keep coming, you realise why you still hold them.
I own ENB, KMI, WMB & PBA.
Would be interested to hear your opinion on KMI (I've been thinking of trimming down for a while now).