By Rob Otman
Enbridge (NYSE: ENB) is a large cap company that operates within the oil, gas and consumable fuels industry. Its market cap is $58 billion today and the total one-year return is -17.79% for shareholders.
Enbridge stock is underperforming the market. It’s beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✓ Earnings-per-Share (EPS) Growth: Enbridge reported a recent EPS growth rate of 4529.12%. That’s above the oil, gas and consumable fuels industry average of 165.24%. That’s a great sign. Enbridge’s earnings growth is outpacing competitors.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the oil, gas and consumable fuels industry is 110.03. And Enbridge’s ratio comes in at 22.53. It’s trading at a better value than many of its competitors.
✗ Debt-to-Equity: The debt-to-equity ratio for Enbridge stock is 95.56%. That’s above the oil, gas and consumable fuels industry average of 64.39%. That’s not a good sign.
✗ Free Cash Flow per Share Growth: Enbridge has decreased its FCF per share over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.
✓ Profit Margins: The profit margin of Enbridge comes in at 9.18% today. And generally, the higher, the better. We also like to see this ratio above competitors. Enbridge’s profit margin is above the oil, gas and consumable fuels average of 7.68%. So that’s a positive indicator for investors.
✗ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Enbridge is 8.47% and that’s below the industry average ROE of 9.25%.
Enbridge stock passes three of our six key metrics today. That’s why our Investment U Stock Grader gives it a Hold.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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Source:: Investment You
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