Enbridge Has $2 Billion Burning a Hole in Its Pockets
Enbridge (NYSE: ENB) has a massive collection of midstream assets constantly throwing off cash. That's great for investors, which benefit from the Canadian giant's well-covered 6.8% dividend yield, but it is about to create a quandary for management. How will this company deal with the extra $2 billion in cash flow it expects to generate in 2022?
Enbridge's business is fairly simple to understand. It operates as a toll taker, collecting fees for the use of its infrastructure assets. Roughly 54% of its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) comes from oil pipelines, 29% from natural gas pipes, 14% from a natural gas utility operation, and 3% from its renewable power business. It is a big player in each area, sporting a huge $80 billion or so market cap. In fact, when it comes to the midstream company's oil and natural gas assets, it is an indispensable part of the energy transportation system.
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Source Fool.com
