1. Enbridge Inc (USA): ENB Buy Pitch
Middlebury SIC – Energy and Transportation Group
5/7/2017

2. Company Overview President and CEO: Al Monaco
Founded in 1949 as Interprovincial Pipe Line Company, Enbridge is headquartered in Calgary, Canada.
Enbridge transports crude oil, liquids and natural gas in pipelines that total approximately 29,000 mi in Canada and the United States. As a distributor of energy, it owns and operates Canada's largest natural gas distribution network, providing distribution services in Ontario, Quebec, New Brunswick and New York state.
ENB has five business segments: Liquids Pipelines, Gas Distribution, Gas Pipelines and Processing, Green Power and Transmission, and Energy Services
President and CEO: Al Monaco
Executive VP and CFO: John K. Whelen
Ind. Chairman of the Board: David Arledge

3. Investment Thesis
Thesis: As the largest diversified energy infrastructure company in North America, Enbridge will benefit from synergies related to its acquisition of Spectra Energy and a stable, profitable business model.
Current price: $41.46 (as of 5/7/17)
52-week price range: $ $45.77
Price Target: $50
Implied Upside: 20%

4. “If you believe in the North American energy industry, I think Enbridge is a must-own stock” – Jim Cramer

5. Company Overview (Cont.)
Revenue: $24.1B
Price/Book: 6.48
EPS: $1.96
P/E: 28.6
Market Cap: $67.7 B

6. SWOT Analysis Weaknesses [intrinsic business weaknesses]
Oil spills.
Project delays – many of ENB's projects are massive and regularly run the risk of cost overruns/missed deadlines.
Threats [threats to the whole market]
Heavy debt load could put ENB at risk of higher interest expenses if rates sharply rise.
Continued diversification beyond NA/pipelines could make ENB too big to manage.
Continued oil glut could lower returns on oil sand pipelines.
Slower economic growth.
Failure to gain regulatory approval for new projects.
Integration issues stemming from SE deal.
Strengths [intrinsic business strength]
Midstream is less sensitive to oil price volatility.
Strong dividends (div yield of 4.30).
$26B of projects being finished in next 2 years.
96% of cash flow is underpinned by long-term commercial agreements.
Less than 5% of EBITDA is exposed to commodity prices.
Size allows ENB to secure discounts on supplies, insurance, etc.
Opportunities [market catalysts] 
Trump's deregulatory agenda make ENB "the ultimate Trump stock."
$1.7B forward looking wind energy investment.
Industry-leading C$26 billion in secured expansion projects in execution.
C$48 billion of development projects.

11. Enterprise Products Prns
Comparable Analysis
Enbridge Inc.
Enterprise Products Prns
Kinder Morgan
Williams Cos. EV $
$81805 $ $
EBITDA
$3641.5
$5268.9
$5952
$2,631.0
Market Cap
68,093.9
57,951.4
44,983.7
25,308.8
Debt/Equity
Current Ratio
Quick Ratio
Return on Equity
163.93
106.43
109.16
141.64
0.65
0.79
0.40
1.39
0.24
0.41
0.25
0.74
13.4
11.87
2.03
0.2

12. DCF Analysis – Base Case

13. DCF Analysis – Bear Case

14. DCF Analysis – Bull Case

15. Conclusion
Pros
Enbridge has consolidated and diversified its business lines with the acquisition of Spectra Energy.
The SE deal adds significant scale, improves the balance sheet, and is accretive to dividend growth.
It's attractive dividend yield and stable profitability make it one of the most attractive investments in the midstream segment.
Cons
The case of Kinder Morgan shows any midstream's dividend can be in danger of being cut, especially in negative business conditions.
Due to environmental concerns, any spill in one of its pipelines can open up ENB to litigation costs and opposition to continued development.
As a low-risk business with stable cash flows and limited commodity price exposure, Enbridge’s share price may not have vast upside potential.
Recommendation: Buy at market price with the expectation that ENB will reach $50 in a year.