Perfect Combo for 2022: Enbridge (TSX:ENB) and 1 Utility Stock
The Motley Fool
Published Dec 11, 2021 10:15
Updated Dec 11, 2021 10:45
Perfect Combo for 2022: Enbridge (TSX:ENB) and 1 Utility Stock
Collaboration appears to be the theme in the pandemic environment, because companies can ensure business growth. Strategic partnerships are happening across and between sectors. Among the most recent partnership that hit the headlines is that of Enbridge (TSX:TSX:ENB)(NYSE:ENB) and Capital Power (TSX:CPX).
The pipeline giant and the independent power producer (IPP) signed a memorandum of understanding to work on a carbon capture and storage (CCS) project. They will jointly evaluate and advance the said CCS project. Enbridge will act as the transportation and storage service provider, while Capital Power will provide the CO2.
However, the partners need to win in the Government of Alberta’s competitive carbon hub selection process and eventual final investment decision.
Low-carbon energy future The proposed project site is Capital Power’s Genesee Generating Station near Warburg, Alberta. Currently, the generation station provides more than 1,200 megawatts of baseload electricity generation to Albertans. The $4.4 billion IPP is repowering its Genesee 1 and 2 units to create the most efficient natural gas combined cycle power generation units in North America.
Capital Power, Through the Genesee CCS Project, Capital Power is well positioned to deliver reliable and affordable electricity for generations to come. Colin Gruending, Enbridge’s executive vice president and president, Liquids Pipelines, said, “We’re excited to be partnering with Capital Power in support of their commitment to a low-carbon energy future.”
Critical collaboration Gruending further said, “Collaboration like this is critical as we look to advance cost-effective, customer-focused carbon capture, transportation, and storage solutions in Alberta and across North America.” The project also commits to protecting land, water, and the environment and engaging meaningfully with local Indigenous communities.
Chris Kopecky, senior vice president and chief legal, development, and commercial Officer at Capital Power, said, “It’s exciting to partner with Enbridge, a sustainability leader, on this project.” He added that collaborative development throughout the CCS value chain is key to ensuring that CCS can be deployed in a safe, responsible, and cost-effective manner.
Reliable passive-income sources Income investors should find the combination of Enbridge and Capital Power in their portfolios perfect. Both stocks are recession-resistant and reliable income sources. The energy stock trades at $48.96 per share (+28.8% year to date) and pays a generous 6.92% dividend. Because it’s a Dividend Aristocrat, your dividends should grow. Enbridge has raised its dividends for 25 consecutive years.
Get The App
Capital Power is one of the Canada Pension Plan Investment Board’s (CPPIB) TSX holdings. Current investors, including CPPIB, enjoy a 17.06% gain thus far in 2021. At $39.38 per share, would-be investors can partake of the lucrative 5.59% dividend.
ESG investments Obtaining approval of the project could boost the energy and utility stocks significantly. Since “socially responsible” or “sustainable” investing could be a major trend in 2022, both companies can become top-of-mind choices of ESG (environmental, social, and governance) investors.
Capital Power is helping build a carbon-neutral future in Alberta by advancing the Genesee CCS Project. However, Enbridge’s ESG goals have reached the next stage of its evolution as an ESG leader. It targets to reduce greenhouse gas (GHG) emissions intensity (35%) by 2020 and achieve net-zero GHG emissions by 2050.
The post Perfect Combo for 2022: Enbridge (TSX:ENB) and 1 Utility Stock appeared first on The Motley Fool Canada.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.