Canadian Pipeline Stocks
The company owns one of the largest natural gas transmission networks in North America, with a 58,000-mile pipeline capable of transporting 25% of natural gas demand across the continents. It is also one of the major natural gas storage operators with a capacity of more than 653 billion cubic feet.
Energy companies are active in the provision of energy infrastructure and services. The energy sector includes companies focused on the exploration, production and marketing of oil, gas and renewable resources worldwide. Founded in 1949, Enbridge is North America’s leading energy infrastructure company dedicated to improving people’s quality of life.
Enbridge connects key supply basins with consumer markets and moves much of North America’s natural gas, natural gas and natural liquids. Liquid pipelines consist of pipelines and associated terminals transporting various types of crude oil and other liquids and hydrocarbons. In addition, Enbridge transports and distributes renewable energy through diversified assets, including a balance of crude oil, oil and natural gas and expanding renewable energy business.
Some pipelines have short-term contracts with oil producers, while others have long-term contracts. When it comes to energy stocks, the best in the industry are midstream companies. Do not forget that rating agencies prefer oil and gas to vertically integrated companies, which value them with greater financial clout.
For many investors, Suncor Energy offers a solid bet on the Canadian oilfield. In many ways, the company picks up a lot because it ticks all the right boxes.
A cursory look at the Suncor Energy portfolio shows the promise of integrated operation. Imperial Oil should also be considered at current prices, with a diversified downstream portfolio and large oil production in the form of major interest in ExxonMobil. At current prices and valuations, Canadian Natural Resources remains an attractive buy.
The current climate has delivered more than 2,000 filling stations in the short term — which is a hit — but the company remains undiminished as Canada’s largest oil refinery, major petrochemical producer and national marketer with a coast-to-coast supply and retail network. It is Canadian pipeline companies, oil producers and natural gas producers that are facing unprecedented economic conditions.
COVID-19 has a devastating impact on Canadian energy companies as oil demand has collapsed and cash flows have been severely affected. Slowly, however, a semblance of normality is returning to global markets. As a result, when popular Canadian stocks fall and dividend yields rise, they become an attractive opportunity.
To qualify, 87 shares must be listed on the Toronto Stock Exchange, be a member of the S & P / Canada BMI Broad Market Index, have increased their annual distributions for five consecutive years, have paid the same dividend for at least two consecutive years and have a float-adjusted market capitalization of at least C $300 million. If these stocks qualify for the index, we will thin the herd for US investors. The figures and statistics on market developments are taken from the table below, dated 17 June 2021.
The top 20 Canadian dividend stocks are listed on the New York Stock Exchange and Nasdaq. Dividend yields are calculated by annualizing the latest quarterly distribution and dividing by the share price. TC Energy (TCE) – TCE pays a quarterly dividend to common shareholders at the board of directors’ discretion and has a long tradition of raising the dividend annually.
I mentioned that the pipeline business is also a stable and reliable cash flow business that provides a decent dividend payer. One of the things we are seeing is that we will see continued consolidation in the area as it becomes more difficult to build pipelines and fewer people are interested in owning them. As you mentioned, dividend investors in Canada can work with what we are talking about today in the pipeline industry.
On Monday, Goldman Sachs analyst Michael Lapides upgraded Cheniere Energy Partners (CQP) after buying the company because of underperforming competitors and risk hedging. He believes pipeline and other energy infrastructure stocks will continue to grow as oil prices remain strong and companies can carry more fuel.
On March 3, 2021, TC Pipeline L.P. completed the previously announced merger with TC Energy. This week we have a similar deal of a different kind when Morgan bought natural gas transmission distributor Stagecoach Services, a joint venture between Con Edison and another company. As these deals go public, there will be many bidders, which brings us back to the main story we want to talk about today because this week, we have an ongoing bidding war for pipeline assets.
The good news and the bad news for oil and gas pipelines are there as the US emerges from the pandemic. Inter Pipeline is for sale, and two different companies are bidding for it.
Experts believe that we will reach peak demand around 2030, and if the shift to renewable energy continues, we will have to produce these raw materials for the foreseeable future. To do this, we need oil companies to produce them and pipelines to ship them. As such, in 2020, you see a mix of Canadian pipeline stocks, Canadian oil stocks in our winning list, and Canadian natural gas producers to hold on to.