Investors and traders seeking to round out their energy portfolio may wish to consider allocating assets towards Canadian companies.
Last month, Enbridge bolstered its earnings outlook for the next two years, expecting growth between 7-9% through 2026. The optimism came alongside Enbridge’s announcement of new investments in the U.S. Gulf Coast, including new export docks and storage tanks. Enbridge also recently announced a joint venture with WhiteWater/I Squared Capital to create pipelines and storage connecting Permian Basin resources to the Gulf Coast.
See More: Permian Gas Fuels Midstream/MLP Investments
“We will continue to prioritize operational excellence, safety, and reliability, and integrated conventional and lower-carbon solutions making Enbridge the first-choice energy delivery company for our customers. Our scale and diversity provide an advantageous position for Enbridge to mirror the pace of the global energy transition,” Enbridge president and CEO Greg Ebel noted.
Enbridge is not the only player in the Canadian energy market that is making moves. TC Energy has been improving its balance sheet through divesting assets. Last month, the company announced it was selling the Portland Natural Gas Transmission System to Morgan Stanley Infrastructure Partners and a Blackrock-managed fund for a total of $1.14 billion. Later in March, TC Energy announced further divesting with the sale of Prince Rupert Gas Transmission Holdings and Prince Rupert Gas Transmission Limited Partnership to Nisga’a Nation and Western LNG.
Canadian Exposure
Enbridge and TC Energy both show that Canadian energy companies are worth taking a look at. While the fund’s holdings are primarily based in the United States, the Alerian Midstream Energy Select Index (AMEI) has about 26% of assets held in Canadian-based companies. In particular, top Canadian holdings for the index include Enbridge (ENB), Pembina Pipeline Corporation (PPL), Keyera (KEY), Gibson Energy (GEI), and TC Energy (TRP). Enbridge, Pembina, Gibson, and Keyera are each currently seeing positive monthly returns, while TC Energy is down about 0.3% over the past month.
AMEI is witnessing strong results. As of March 28, 2024, AMEI is up nearly 30% over the last 12 months, while seeing a yield of 5.8%. Exposure to this index can provide a portfolio with robust diversification while promising high potential returns and yield.
As an ETF benchmarked to AMEI, the Alerian Energy Infrastructure ETF (ENFR ) can provide traders and investors with valuable exposure to Canadian energy giants. The fund holds a notable amount of assets in Enbridge, TC Energy, Pembina, and Keyera. ENFR is currently up about 27% over the last 12 months and has risen over 6% over the last month.
For more news, information, and analysis, visit the Energy Infrastructure Channel.
AMEI is the underlying index for the Alerian Energy Infrastructure ETF (ENFR).
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