Analyst Note| Stephen Ellis |
Enbridge’s 2022 guidance looks very healthy to us and reflective of a strong oil and gas price environment. With the guidance consistent with our forecast, we don’t expect to make any material changes, so our fair value estimate and narrow moat rating remain unchanged. EBITDA for 2022 is expected to be CAD 15.3 billion at the midpoint, an increase of 9% over 2021 expectations. The major drivers of this performance will be higher volumes on the Mainline system, a full year of contributions from the Ingleside acquisition and Line 3 pipeline, and other projects being placed into service. Capital spending plans of CAD 3 billion-CAD 4 billion annually, with up to CAD 2 billion available for alternative uses including opportunistic projects, debt deleveraging, or share buybacks remain unchanged. Initially, on the capital returns front, Enbridge announced a modest increase in the quarterly dividend to CAD 0.86 per from CAD 0.835, and an opportunistic CAD 1.5 billion share buyback program.