Should you buy Enbridge (ENB) stock as it partners with Pacific Energy?

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 Should you buy Enbridge (ENB) stock as it partners with Pacific Energy?
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Highlights

  • Enbridge said its profit was C$ 450 million in Q2 2022 relatively lower than 1.39 billion in Q2 2021
  • The midstream company is set to dole out a quarterly dividend of C$ 0.86 on September 1
  • The TSX Capped Energy Index also gained by over 41 per cent so far this year

Enbridge (TSX: ENB) gained traction at market opening on Friday, July 29, after it announced a partnership agreement with Singapore-headquartered Pacific Energy to construct and operate the Woodfibre LNG project located in Squamish, British Columbia. According to the agreement, Enbridge will own a 30 per cent equity stake while Pacific will retain the remaining 70 per cent stake in the 2.1 million-tonne-per-year LNG export facility.

At the time of writing, the ENB stock was up by 0.2 per cent from the previous close. Also, Enbridge released its financial results for Q2 2022. Let us have a deep dive into its quarterly financial performance.

Enbridge (TSX: ENB)’s Q2 FY2022 financial results

Enbridge, which reports according to the US Generally Accepted Accounting Principles (GAAP), said its profit was C$ 450 million in Q2 2022, down by C$ 944 million from C$ 1.39 billion in the same quarter of the previous year.

The large-cap company posted a GAAP profit per share of C$ 0.22 in the latest quarter compared to C$ 0.69 in Q2 2021. However, cash provided by operating activities swelled to C$ 2.53 billion in Q2 2022, higher than C$ 2.48 billion in Q2 2021.

Furthermore, Enbridge also saw an increased distributable cash flow of C$ 2.74 billion in the second quarter this year compared to C$ 2.5 billion in the same period a year ago.

Enbridge (ENB) joins Pacific Energy for Woodfibre, posts Q2 results. A buy?©Kalkine Media®; ©Garis Studio via Canva.com

Enbridge’s stock performance

The ENB stock zoomed by over 16 per cent in 12 months. The pipeline stock slipped by nearly four per cent from a 52-week high of C$ 59.69 (June 8). According to Refinitiv, ENB stock seems to be on an upward trajectory, with a Relative Strength Index (RSI) value of 68.02 on July 28, supported by a trading volume of 5.8 million shares.

Bottom line

The TSX Capped Energy Index also gained by over 41 per cent so far this year. Enbridge is set to disburse a quarterly dividend of C$ 0.86 on September 1. With an investment agreement for Woodfibre, the Canadian midstream company could extend exposure to the global LNG markets.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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