Hillcrest Energy Technologies. (CSE: HEAT)
From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future.
Enbridge Inc（TSX:ENB）, a Canadian large-cap energy infrastructure titan, has created substantial wealth for its shareholders, with an adjusted return of nearly 870% over the past 20 years, compared to the TSX index’s return of “only” 404%. Despite this, Enbridge currently offers a high dividend yield of 7.3%, distributing an annual dividend of $3.66 per share. Moreover, the company has seen an average annual dividend growth of 10% over the past 29 years.
Enbridge’s cash flow is stable, reliable, and diversified, making it a top choice for income-focused investors.
Despite uncertainties in the macroeconomic environment, Enbridge continues to report strong performance, with a first-quarter 2024 adjusted profit of $2 billion, or $0.92 per share, an 8% increase year-over-year. Adjusted EBITDA rose from $4.5 billion in the same period last year to $5 billion, an 11% increase.
Additionally, operating cash flow and distributable cash flow were $3.2 billion and $3.5 billion, respectively. Enbridge distributed $1.95 billion in quarterly dividends, resulting in a payout ratio of 56%, providing financial flexibility for acquisitions and debt reduction. Over the past five years, the company has distributed $34 billion in dividends, with a target to increase this amount to $40 billion by 2028.
However, it may be challenging for Enbridge to replicate its past returns. Meanwhile, Enerflex Ltd (TSX:EFX), a company with a market value of only $881 million in the energy infrastructure sector, is poised to become the next high-yield Canadian energy stock.
Enerflex reported first-quarter 2024 revenues of US$638 million, up from US$610 million in the same period last year, with significant growth in energy infrastructure product sales. At the end of the quarter, the company had US$420 million in engineering systems business contracts, with total backlog rising to US$1.3 billion, indicating a high certainty of performance. Additionally, Enerflex highlighted that US$1.6 billion in revenues related to its energy infrastructure assets would be recognized over the next few years.
At the end of the first quarter, Enerflex generated operating cash flow of US$110 million and free cash flow of US$78 million, with a quarterly dividend per share of $0.025, totaling less than US$3.5 million in dividend payments, representing a payout ratio of less than 5%. The company used extra cash to repay US$72 million in long-term debts, ending the quarter with a net debt balance of $753 million, which includes $110 million in cash, reducing the net debt to EBITDA ratio from 2.9 a year earlier to 2.2.
Valuation-wise, Enerflex has a forward P/E ratio of 25, which may seem high for an energy company. However, its adjusted earnings per share are expected to more than double to $0.28 in 2024 and increase to $0.65 in 2025.
Analysts remain bullish on this Canadian dividend stock, predicting nearly a 50% increase in its stock price over the next 12 months.
