Why Fundamental Investors Love Enbridge Income Fund Holdings Inc (TSE:ENF)

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Enbridge Income Fund Holdings Inc (TSE:ENF) due to its excellent fundamentals in more than one area. ENF is a financially-healthy company with a a strong track record of performance, trading at a discount. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Enbridge Income Fund Holdings here.

Flawless balance sheet with solid track record

In the past couple of years, ENF has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. Not only did ENF outperformed its past performance, its growth also exceeded the Oil and Gas industry expansion, which generated a 81.26% earnings growth. This is an optimistic signal for the future. ENF is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that ENF manages its cash and cost levels well, which is an important determinant of the company’s health. Investors should not worry about ENF’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is rather impressive for a CA$5.04b market cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.

TSX:ENF Income Statement June 13th 18
TSX:ENF Income Statement June 13th 18

ENF’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of ENF’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, ENF’s share price is trading below the group’s average. This supports the theory that ENF is potentially underpriced.

TSX:ENF PE PEG Gauge June 13th 18
TSX:ENF PE PEG Gauge June 13th 18

Next Steps:

For Enbridge Income Fund Holdings, I’ve compiled three important factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for ENF’s future growth? Take a look at our free research report of analyst consensus for ENF’s outlook.
  2. Dividend Income vs Capital Gains: Does ENF return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from ENF as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ENF? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!