Enbridge (ENB) reported revenue close to double the year-earlier level and earnings about a third lower in its report for the quarter ended June. Nearly all of the revenue increase came from commodity sales, and commodity costs rose by almost the same amount, so the article calls this a gross-up rather than growth, with an operating margin of just 10.16%. The earnings decline stems mainly from other income swinging from a sizeable gain to a small expense, largely unrealized derivative valuation changes, while interest expense rose 18.10% and borrowing equals 162.98% of equity. The shares closed at $48.10 on October 16 and have returned -7.9% over six months, versus 10.5% for the Insider Monkey Billionaire Index and 9.3% for the State Street SPDR S&P 500 ETF Trust. The author argues the stock's valuation of 20.37 times next year's expected earnings and a 5.82% yield do not look like a company in real difficulty.
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