With a huge $60 billion market cap, Canada's Enbridge (NYSE: ENB) is easily one of the largest midstream companies in North America. It currently offers a yield of roughly 8.3%, generous in any environment -- but particularly today, when the S&P 500 Index is yielding less than 2%. But these facts alone don't make Enbridge a buy. In fact, there are some pretty notable reasons to dislike the company. Here's what you need to know, and why the negatives aren't as bad as you may think.
In the midstream space, a key leverage metric is financial debt to EBITDA. Enbridge's ratio here is about 7.1 times. That's up from a little below 5 times at the start of 2020. That's not an unusual increase, as companies throughout the industry (and the economy, frankly) took on debt to boost liquidity during the early days of the COVID-19 crisis. It's just good business sense to ensure that you have enough cash to muddle through when times get tough.
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Source Fool.com