Q: What differences do you see between ENB & TRP for total return over the next 5 yrs?
Thank you.
Mike
Thank you.
Mike
5i Research Answer:
ENB is trading at 17x Forward P/E, growth in EBIT is expected to be around 6%-8% on average over the next few years, and the current net debt/EBITDA is 6.1x.
TRP is trading at 13.2x Forward P/E, growth in EBIT is expected to be around 4%-6% on average in the near term, and the leverage profile is also similar at 6.1x net debt/EBITDA.
Both are quite similar in terms of leverage profile, ENB has higher valuations but also higher growth compared to TRP. However, we think ENB would do better from here given the very healthy cash flow and solid growth profile of ENB, while TRP is currently in a heavy capital investment cycle.