Tuesday, October 27, 2020

ENB.TO stock: 5 year investment plan - near 100% return

 Following in Buffett’s footsteps, Suncor is a better bet than AC in the pandemic. A safer investment than Suncor is the pipeline operator Enbridge (TSX:ENB)(NYSE:ENB). It doesn’t have exposure to oil prices, which makes it more stable. It has exposure to natural gas and renewable energy. Its assets are pipelines, which again have a longer life and a higher return on investment.

Enbridge’s “toll-like” business model ensures regular cash inflow. The more pipelines it builds, the more cash it earns and increases its dividends every year. This high capacity doesn’t lead to cash burning in the event of weak demand.

In a normal scenario, Enbridge would continue to pay the current dividend without increasing it, and its stock would return to the pre-pandemic level in five years. It will give you over $46,000 ($21,325 in dividends and $25,000 in capital appreciation) income on $50,000 investment.

The post Why Buffett Holds Suncor Energy (TSX:SU) and Not Air Canada (TSX:AC) appeared first on The Motley Fool Canada.

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