Enbridge Raises Dividend, Plans Share Buybacks as Profit Set to Rise
(Reuters) — Enbridge Inc. on Tuesday raised its dividend and announced plans to buy back shares, as the Canadian pipeline operator forecast higher core earnings in 2022 on rising demand for oil and gas.
Energy stocks have bounced back this year as investors are rewarding companies that are disciplined with their capital and as many North American energy firms are returning higher free cash flow to shareholders rather than investing in growth.
Pipeline operators have also benefited from shipping volumes that have recovered from the COVID-19 pandemic lows on the back of strengthening global demand for oil and gas.
Enbridge raised its quarterly dividend by 3% to 86 Canadian cents per share, effective March, and said it would buy back up to $1.5 billion of its outstanding shares.
The company also forecast 2022 EBITDA (earnings before interest, taxes, depreciation and amortization) between C$15 billion and C$15.6 billion, higher than its 2021 expectations of C$13.9 billion to C$14.3 billion.
The company said it expects 2022 distributable cash flow per share of C$5.20 to C$5.50, about 9% to 10% higher than its 2021 guidance.
Enbridge expects to have C$5 billion to C$6 billion of annual investment capacity as part of its three-year plan, of which C$3 billion to C$4 billion is prioritized to be used for core low capital intensity and utility-like investments.
It also sanctioned C$1.1 billion of new capital projects, which is expected to drive EBITDA generation through 2024.
"We view the first glance at investor day as neutral with financial guidance roughly in-line and an equity returns plan that contemplates share repurchases with no commitment made today," analysts at Tudor, Pickering, Hold & Co wrote in a note.
Enbridge, which set emission reduction targets last year, hopes to be a net zero emitter of greenhouse gases by 2050.
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- Boardwalk Approves 110-Mile, 1.16 Bcf/d Mississippi Kosci Junction Pipeline Project
- Kinder Morgan Approves $1.4 Billion Mississippi Crossing Project to Boost Southeast Gas Supply
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- Enbridge Should Rethink Old, Troubled Line 5 Pipeline, IEEFA Says
- Polish Pipeline Operator Offers Firm Capacity to Transport Gas to Ukraine in 2025
Comments