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Enbridge’s focus as an energy company extends to energy generation, transmission and distribution. Over the years, it has also enriched its portfolio with alternative energy sources such as wind, solar and geothermal power generation.
It is undoubtedly impossible to talk about the emergence and growth of the energy industry in North America without mentioning Enbridge Inc. The history of this multinational company dates back to one of the first oil discoveries in the country and Imperial Oil.
Enbridge pipeline network is the longest in the world. Through this network, they transport 28 percent of North America’s crude oil and also lead the pack in gathering, processing, transporting and distributing natural gas.
Headquartered in Calgary, Alberta, the company has approximately 16,000 people on its payroll. In 2016, it generated $34.5 billion in revenue and $2.1 billion in profits. That year, Enbridge also managed total assets of $85.8 billion.
Enbridge is a publicly traded company listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE).
A Brief History of Enbridge Inc.
In 1947, after the Imperial Oil Company discovered oil in Leduc, Alberta, it was the beginning of the oil industry in the province.
Two years later, on April 30, 1949, Imperial began building pipeline systems to transport Alberta’s oil to refineries. This is how the Interprovincial Pipe Line Company (IPL) was born.
Starting with a budget of $73 million to build their first pipeline, in October 1950 their pipeline system began transporting oil from Edmonton to Superior, Wisconsin. IPL continued to expand its tentacles and continued to build more pipelines like the one that connected Wisconsin to Ontario in Canada in 1953.
The 1950s and 1960s were a particularly dynamic period for IPL, which expanded its network across the United States through its subsidiary, the Lakehead Pipe Line Company.
Lakehead built pipelines that connected the cities of Detroit, Buffalo and Chicago, among others. In the early 1970s, Interprovincial was responsible for transporting 1 million barrels of crude across the continent daily.
Enbridge – 1970 and beyond
The remainder of the 1970s was marked by expansion in Canada, such as with the $247 million expansion from Alberta to Montreal in 1976. In the mid-1980s, IPL added the Northwest Territories and Norman Wells oil fields to its pipeline network.
The company first changed its name in 1988 to Interhome Energy Inc. During this period, it also began implementing its expansion strategy through acquisitions.
One of its first purchases was when they bought Consumers’ Gas – now known as Enbridge Gas Distribution Inc – in 1996. This marked their foray into natural gas transportation. Around the same time, the company changed its name again from Interhome Energy Inc. to IPL Energy Inc.
IPL Energy’s diversification into the gas distribution sector has not hindered its continued pipeline expansion plans. At the same time, they also purchased stakes in companies like AltaGas Services, Chicap Pipeline, and Ocensa Pipeline, the latter two being strict about expanding their pipeline network (they would eventually sell their stake in Ocensa in 2009).
The company’s current name, Enbridge Inc., came into existence in 1998. The name is a portmanteau of the words “energy” and “bridge.”
Enbridge – 2001 and beyond
As Enbridge Inc., in 2001 they continued to expand their natural gas efforts with the purchase of Midcoast Energy Resources in Houston, marking their internal foray into gas distribution. Other acquisitions included Shell Gas Transmission LLC in 2005 as well as a majority stake in a plethora of offshore gas pipelines.
Enbridge also began investing in renewable energy in 2001. One of its first investments was in the Sunbridge wind energy project in Saskatchewan. Eleven years later, the company was involved in around 20 other renewable energy projects, including wind farms, solar power, waste heat recovery programs and geothermal energy, for a total investment of $5 billion.
Over the years, the company has also taken care to update its operational policies to be more environmentally friendly. As a result, Enbridge Inc. experienced a period where it was ranked among the world’s most sustainable companies for eight consecutive years. In 2016, it also ranked 12th on Newsweek’s media list. The world’s most sustainable companies. It was the same year that they acquired Spectra Energy for $28 billion in an all-stock deal.
Enbridge Stocks
Enbridge Inc. trades under the symbol ENB on the Toronto Stock Exchange.
The company’s focus on pipeline expansion, natural gas diversification and growth through acquisition has earned it an enviable place in the North American energy sector. But the energy landscape has also been filled with competition during this time. This is reflected in their share price performance since the early 1990s.
In 1991, ENB’s stock price opened the year at $3.17 and closed at $3.59. In 2019, ENB opened at $31.58 and closed at $39.77. From the close of 1991 to 2019, that represents share price growth of 1,066%.
The company’s stock price has seen attractive annual growth rates. Interestingly, 1998 – the year they changed the name to Enbridge – does not fall into this category. In fact, 1998 has been one of the slowest growth years so far. The year recorded a growth rate of just 2.09%, having closed at $5.63 the previous year and at $5.74 in 1998. Years like 1992 (-38.26%), 1994 (-15.37%), 1999 (-12.36%) all ended in the red during the 1990s.
Below is the screenshot – Enbridge (ENB) stock price today:
In the 2000s, there were also some red years. The year 2008 was particularly red for most of the world economy. Enbridge’s stock price saw a decline of 19.69% as it opened at $20.28 and closed at $16.24.
Other reading years in the 2000s include 2001 (–4.92%) and 2002 (–0.29%). Red years in the 2010s include 2015 (–35.44%), 2017 (–7.15%), and 2018 (–20.53%), with 2015 being the worst in terms of percentages.
Due to the ongoing global health pandemic caused by the coronavirus, the global economy has once again started the year on a difficult footing. Enbridge’s stock price closed 2019 up 27.96% (open $31.58, close $39.77). However, since the start of the year, ENB’s stock price has fallen by more than 27%. As of April 9, 2020, the stock price was $28.70.
Enbridge stock price
Over the past 30 years, ENB’s stock price experienced its largest percentage increase in 1997 (55.87%) and its largest percentage decline in 1992 (38.26%).
Enbridge’s dividend has increased steadily throughout the 2010s. In 2013, the dividend distributed to shareholders was $0.3150 in the first quarter of that year.
In the fourth quarter of 2013, it was $0.35. It crossed the $0.50 mark in the fourth quarter of 2015, when the dividend stood at $0.53. It then crossed the $0.60 mark in the second quarter of 2017 ($0.61) and the $0.70 mark in the fourth quarter of 2018 ($0.7380). Total dividends paid for 2019 were $2.95.
The latest dividend change was for the quarter from December 10, 2019 to March 1, 2020. The dividend for this quarter was $0.81, recording a dividend yield of 6.31% and an increase of $0.0720 from the last dividend value.
Enbridge Stock Dividend (ENB)
First of all, Enbridge or ENB stock pays excellent dividends per quarter. It wouldn’t be wrong to say that Enbridge has been one of the best dividend paying companies in decades. They have been distributing dividends for over 65 years to date.
Another interesting thing to note here is that ENB, as a blue-chip company, has increased its dividend for the last 25 years in a row, growing at a staggering 11% CAGR. Wow!
The screenshot below – Showing the increase in ENB stock dividend over the years.
The screenshot below will show you the latest quarterly dividends and Enbridge increases:
Whether you like the oil and gas industry or not, whether the news is all negative about Enbridge, I am 100% sure that this is one of those stocks that should be in any investor’s portfolio. The dividends alone will make you smile.
Conclusion
Enbridge is Canada’s largest energy company and one of the leading industry names on the continent. Even amid the global economic instability of 2020, Enbridge stock remains one of the best investment choices. Over the past three decades, the company has demonstrated its resilience in seeking greater success. Operationally, Enbridge is one of the most sustainable and environmentally friendly energy companies in the world and has been recognized as such in many notable circles.
Through constant domestic and international expansion, diversification, and acquisitions, Enbridge has thus far proven to be a good choice for investors who prioritize security in their portfolio. You might not get the same extravagant growth as with Berkshire Hathaway, but you might just be able to have more peace of mind about your investments.
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