To The Moon

US stock market has plunged nearly -10% from its recent high due to concerns that Trump’s tariffs could cause a recession or worse a stagflation.

On Mon, 21 Apr 2025 it fell again as Trump’s stepped-up verbal abuse of US Federal Reserves chairman Jerome Powell resulted in panic-stricken sentiments permeating US market. (see below)

Many believed that if Trump even attempts to remove Powell by force, the action alone could cause US market to crash big time, if current fears turn into reality.

Coupled with the tariffs that are in place, US is poised for an epic economic downturn that can in turn, cause corporate profits to plummet.

Thankfully the joker realized his mistake and toned down the rhetorics almost immediately.

This resulted in US stock market rallying for 4 consecutive days, including Fri, 25 Apr 2025 that usually pulls back due to weekends’ uncertainty. (see below)

However, in the days of chaos caused by the US president, there were a handful of companies that seemed better able to weather economic storms than others.

Case in point - $Enbridge(ENB)$.

It has proven its durability over the decades.

The pipeline & utility giant currently pays a dividend yielding nearly 6.0%, that is one of many compelling reasons it can help shelter an investor’s portfolio from any continued downdraft.

What is Enbridge ?

Enbridge is an energy infrastructure behemoth.

• It operates the longest & most complex crude oil and liquids transportation system in North America. (Oil)

• It also has leading natural gas transmission and distribution franchises. (Gas)

• On top of that, it has a growing renewable energy platform. (Renewables)

One common thread that runs through the company's vast network of critical energy infrastructure is the durability of the cash flows its assets produce.

About 98% of its earnings come from cost-of-service agreements or long-term, fixed-rate contracts, that produce very predictable cash flows.

Profile

Enbridge's cash flow is so low-risk & predictable that it has achieved its annual financial guidance for 19 years consecutively.

A period includes two severe recessions and several other periods of market turmoil.

Overall stability of its cash flow has enabled Enbridge to pay a very durable dividend.

The energy infra giant has paid dividends for 70 straight years.

And, it has increased its dividend for 30 years in a row.

Considering US has experienced several recessions over the last 30 years, that is impressive - don’t you agree?

Investors’ Rewards.

Enbridge supports its high-yielding dividend with a very strong financial profile.

It pays out a reasonable 60% - 70% of its stable cash flow in dividends.

That gives it a big cushion while enabling Enbridge to retain billions of dollars in excess cash flow each year to fund its continued growth.

The company also has a strong investment-grade-rated balance sheet.

Resilient growth ahead

Enbridge has billions of dollars in annual investment capacity between its post-dividend excess free cash flow and balance sheet capacity.

It can capitalize on its financial flexibility to:

• Invest in organic expansion projects.

• Make accretive acquisitions.

• Repurchase its shares opportunistically.

It also has the option to hold back capacity by strengthening its balance sheet to enhance its future flexibility.

As of 25 Apr 2025

Technical Analysis.

ENB’s technical chart reinforces this stock’s resilience.

For a start, its 25 Apr 2025 stock price of $46.19 is above its:

• 20-day moving average.

• 50-day moving average.

• 200-day moving average.

As added plus, its 20-day ma trending above its 50-day ma, a bullish signal that indicates a potential uptrend.

Tariff’s Scare.

ENB was not spared from Trump’s negative tariffs impact.

On 08 Apr 2025, eve of the short-lived “reciprocal tariffs”, ENB fell by -2.05%; just like any other US stocks. (see above)

When it was announced that the “reciprocal tariff” will be frozen for 90-days from 09 Apr 2025 onwards, ENB recovered its lost grounds, just 3 days later.

YTD, it spots a +7.47% gain (or $3.21) to its stock price $46.19 (as of 25 Apr 2025).

Quarterly Earnings.

For Q4 2024, ENB’s earnings details were as follows:

• Revenue: came in at $11.59 billion vs $8.37 billion (Q4 2023), that was a +27.78% YTD gain.

• Earnings per share (EPS): was $0.53 vs $0.47 (Q4 2023), that was a +11.32% YTD gain.

Guidance for Q1 2025.

On 14 Feb 2025 when ENB Q4 2024 earnings were released, US tariff situation was relatively low-key; with US market still buoyant.

Below was its Q1 2025 guidance / outlook.

• Adjusted EBITDA: $19.4–20.0 billion.

• DCF per share: $5.50–5.901.

• Near-term growth (2023–2026): [1] 7–9% adjusted EBITDA growth. [2] 4–6% adjusted EPS growth, and [3] ~3% DCF per share growth annually.

The CEO also highlighted stability, with growth driven by its then-recent acquisitions (e.g., Algonquin Gas Transmission settlements) and infrastructure projects.

Prevailing optimism then, led to a declared dividend increased by +3.0% to $0.9425 quarterly ($3.77 annualized).

ENB is on schedule to report its Q1 2025 earnings in 2 weeks’ time on Fri, 09 May 2025.

Hopefully by then, the tariffs mess that has thrown world economies into spins have some resolutions meted out and final tariffs “milder” than the initial sweeping rates of 40%+++.

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• Do you think Trump’s tariffs that were ill-planned & badly executed will begin to unravel via negotiations starting in May 2025 ?

• Do you think ENB is a good investment option, given that analysts have identified (a) Healthcare and (b) Energy as the go-to defense stocks during turbulence times ?

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