(ENB) Enbridge Incorporated – Growth And Income – Zacks Rank Buy

Enbridge Inc. (ENB) is a pipeline operator that has been consistently paying dividends to shareholders for the last 60 years. Furthermore, following the second quarter earnings release, shares of this Zacks #2 Rank (Buy) are on the upside.

Mixed Quarter

On August 2, Enbridge Inc. reported second quarter earnings of 36 cents per share, which was flat with last year and 2 cents short of the Zacks Consensus Estimate.

Revenues, however, increased 11.4% to $5.7 billion, which substantially beat the Zacks Consensus Estimate of $4.85 billion by 17.6%.

Enbridge Inc. expects its earnings per share for 2012 to remain in the range of C$1.58 to C$1.74.

Earnings Estimates Move Up

The past 30 days have seen two of eight estimates for 2012 move upward, while one estimate was pulled back. The Zacks Consensus Estimate has increased by a penny to $1.64 per share, reflecting an estimated year-over-year growth of 25.0%.

For 2013, three of eight estimates were revised upward in the last 30 days, pushing the Zacks Consensus Estimate higher by a penny to $1.85 per share. This reflects an estimated year-over-year growth of 13.2%.

Stable Dividend

Enbridge Inc. has been consistently paying dividends to its shareholders for the last 60 years, and has also increased its dividend every year since 1996. The current annualized rate of $1.13 per share reflects a dividend yield of 2.9%.

Reasonable Valuation

Shares of Enbridge Inc. are trading roughly 24.4 times the full year 2012 estimate with the PEG ratio at 2.44 times. The price-to-book is at 3.00x, a 50.0% premium to the peer group average of 2.00x. The price-to-sales is at 1.57x, a 46.2% discount to the peer group average of 2.92x.

The company has a trailing 12-month ROE of 12.5% compared with the peer group average of 11.4%.

Given a double-digit earnings growth prospect in the current year, the valuation presents a window of opportunity for investors seeking income and growth.

Based in Calgary, Canada, Enbridge Inc. was founded in 1949. This pipeline operator is engaged in the distribution and transportation of crude oil and natural gas in the United States and Canada. The company has a market capital of $31.85 billion and 7,000 employees. Enbridge competes with TransCanada Corp. (TRP).

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