Why You Should Consider Enbridge Inc and TransCanada Corporation for Your Portfolio

Look beyond current numbers and consider what Enbridge Inc (TSX:ENB)(NYSE:ENB) and TransCanada Corporation (TSX:TRP)(NYSE:TRP) have planned for future growth

| More on:
The Motley Fool

In the investing world, it’s not always ‘what have you done for us lately?’ Often, it’s ‘what are you planning to do for us down the road?’

Here are two companies in the oil and gas pipeline industry that I believe are worthy of investing in because of their growth plans.

1. Enbridge Inc

Enbridge Inc (TSX: ENB)(NYSE: ENB) has a suite of growth projects amounting to a record value of capital investment. All are expected to come into service by 2017. Byron Neiles, SVP, Major Projects, said, “We’re currently working on $36 billion in commercially secured growth projects, and every single one of our businesses is growing — from liquids and gas pipelines to renewable power generation to gas distribution.”

Alberta Regional Infrastructure initiative: This initiative is to support the development of Alberta’s oil sands. One element of this initiative is the proposed Norlite Diluent Pipeline. This pipeline, when joined with the company’s existing Southern Lights Pipeline, would create a diluent pathway from Chicago to the core of Alberta’s oil sands.

Flanagan South pipeline project: This is a US$2.8-billion project. It will extend 950 kilometres from Enbridge’s Flanagan Terminal near Pontiac, Illinois to Cushing, Oklahoma. The line will have an initial capacity of approximately 600,000 barrels per day. The benefits of this project should begin to be realized soon, as it is expected to come into service this quarter.

Line 3 replacement program: This is a $7 billion project and the largest in Enbridge’s history. It is a considerable enhancement of the company’s mainline liquids pipeline system. This is the Canadian and U.S. mainline system running from Edmonton, Alberta to Superior, Wisconsin.

2. TransCanada Corporation

TransCanada Corporation (TSX: TRP)(NYSE: TRP) also develops and operates energy infrastructure in North America. In the last 10 years, TransCanada has invested more than $40 billion in high-quality natural gas pipelines, oil pipelines and power facilities.

Recent project completion: In January of this year, TransCanada’s Gulf Coast Project commenced delivering crude oil to Texas refineries. This completed crude oil pipeline provides a direct connection between the oil hub in Cushing, Oklahoma and delivery points on the U.S. Gulf Coast. The project cost US$2.3 billion.

Coastal GasLink Pipeline project: Shell Canada and its JV partners in the LNG Canada project chose TransCanada to develop a pipeline (650-kilometres) to deliver natural gas from the Montney gas-producing region, near Dawson Creek, B.C., to LNG Canada’s proposed liquefied natural gas facility near Kitimat, B.C. The Coastal GasLink pipeline will provide the transportation capacity required to support continued natural gas development activities in northeast B.C.

Napanee Generating Station: TransCanada is in the preliminary stages of developing the proposed Napanee Generating Station. This proposed facility will be on the existing Ontario Power Generation Lennox Generating Station site near the Town of Napanee. The proposed facility will provide on-demand power to Ontario homes, schools, institutions and businesses. The project is a 900-megawatt natural gas-fuelled electricity generating station.

The takeaway for investors: I believe these major investments in energy infrastructure will result in greater earnings for the companies mentioned and greater EPS and future dividend increases for shareholders.

These are just a few examples of the capex programs these companies are undertaking. Perform your due diligence on these two companies that have future plans for padding your trading account with income.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Michael Ugulini has no position in any stocks mentioned.

More on Investing

Double exposure of a businessman and stairs - Business Success Concept
Investing

Better Buy: RBC Stock or the Entire TSX?

Royal Bank of Canada (TSX:RY) is a robust stock, but the index fund could be better long term.

Read more »

Family relationship with bond and care
Investing

Retirees: 2 Top TSX Dividend Stocks to Buy for TFSA Passive Income

Top TSX dividend stocks now trade at discounted prices for TFSA investors seeking passive income.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Metals and Mining Stocks

Beat the TSX With This Unstoppable Dividend Stock

This dividend stock continues to outpace the TSX and then some, providing you with a dividend that you'll want to…

Read more »

Energy Stocks

Here’s My Top Stock to Buy Now, and it’s Not Even a Question

Tourmaline is a quality energy stock trading on the TSX. Here's why I remain bullish on TOU stock right now.

Read more »

Dice engraved with the words buy and sell
Tech Stocks

Selling Losers Before 2023? Buy These 2 TSX Stocks With the Proceeds 

There is one month to 2023. Now is the time to sell your loss-making stocks, take the tax advantage, and…

Read more »

A meter measures energy use.
Dividend Stocks

TFSA Investors: 3 Safe Utility Stocks to Buy and Hold for Decades

Here are three top utilities to spend some fresh TFSA cash on in the new year.

Read more »

money cash dividends
Dividend Stocks

TFSA Investors: An Easy Way to Boost Your Payouts to $350 Per Month

Because of the tax-free nature of the TFSA, investors have several advantages, especially when buying high-quality dividend stocks.

Read more »

Piggy bank next to a financial report
Investing

How to Turn $10,000 Into $200,000 for Retirement

Buy top dividend stocks and use the distributions to acquire new shares.

Read more »