Enbridge's Profit Just Fell 7%. Here's Why That's Not the Real Story.
The stock, up more than 7% this year, is down 5% since its second-quarter earnings report.
Overview
Midstream operator Enbridge (NYSE: ENB) reported earnings on July 31, and its stock has tumbled more than 7% since. The reason was obvious. The company's profit margin narrowed because its heavy debt load is weighing on net earnings.
Enbridge reported earnings per share (EPS) of CA$0.64, down 36% year over year, and the company's total leverage is around 5.1x debt to earnings before interest, taxes, depreciation, and amortization (EBITDA). That's a legitimate concern, even for a company with steady cash flows such as Enbridge. It's important to realize, though, that much of that is from the costs of new energy infrastructure projects that will lead to long-term revenue growth.
Details
Here are three reasons why Enbridge remains a buy.
Source
Originally published at www.fool.com.