CALGARY - Enbridge Inc (TSX:ENB). (TSX: NYSE:ENB) (NYSE: ENB), a major energy infrastructure company, has finalized the acquisition of The East Ohio Gas Company (EOG) from Dominion Energy (NYSE:D), Inc., it was announced today. The newly acquired utility will operate under the name Enbridge Gas Ohio and become part of Enbridge's Gas Distribution and Storage Business Unit.
EOG, recognized as a leading single-state utility, provides services to over 1.2 million customers across more than 400 communities in Ohio. It boasts a substantial asset base, including over 22,000 miles of transmission, gathering, and distribution pipelines, along with underground storage facilities and connections to multiple interstate pipelines and large natural gas producers.
Michele Harradence, Enbridge Executive Vice President and President of Gas Distribution and Storage, commented on the strategic importance of the acquisition. "This gas utility will help blend and extend our cash flow growth outlook through the end of the decade by adding a steady, regulated investment that supports our long-term dividend profile," Harradence said. She also emphasized the utility's role as critical infrastructure for delivering safe and affordable energy.
The acquisition is expected to contribute more than 40% of the total annualized EBITDA from the three gas utilities Enbridge is acquiring from Dominion. The other two acquisitions, Questar Gas Company and the Public Service Company of North Carolina, are anticipated to close in 2024, subject to regulatory approvals.
Enbridge, headquartered in Calgary, Alberta, operates a vast network of natural gas, oil, and renewable power networks across North America and has a growing offshore wind portfolio in Europe. The company, which has committed to reaching net-zero greenhouse gas emissions by 2050, is also investing in new technologies such as hydrogen, renewable natural gas, and carbon capture and storage.
The information regarding this transaction is based on a press release statement.
InvestingPro Insights
As Enbridge Inc. (NYSE: ENB) solidifies its presence in Ohio with the strategic acquisition of The East Ohio Gas Company, the company's financial health and investment potential come into focus. Enbridge has demonstrated a commitment to shareholder returns, raising its dividend for an impressive 21 consecutive years, a testament to its stability and confidence in future cash flow. This is further supported by the company's substantial dividend yield, which stands at a robust 7.73% as of the last dividend's ex-date, reflecting a strong income-generating asset for investors.
From a valuation standpoint, the company is trading at a P/E ratio of 16.67, which, when compared to its near-term earnings growth, suggests that the stock may be undervalued. This could be an attractive entry point for investors seeking a balance between value and growth. Additionally, the company's low PEG ratio of 0.14 indicates potential for future earnings growth at a rate that far exceeds its current price-to-earnings ratio.
InvestingPro Tips highlight that Enbridge is a prominent player in the Oil, Gas & Consumable Fuels industry and has maintained dividend payments for 52 consecutive years, reinforcing its role as a reliable income stock. While two analysts have revised their earnings downwards for the upcoming period, the company's long-term profitability remains intact, with predictions of profitability for the current year.
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