reports
- Travis Miller
Morningstar | Spectra Unitholders Face Lower Cash Payments in 2019, bu...
We are reaffirming our $52 per unit fair value estimate for Spectra Energy Partners as the company moves toward closing its consolidation with parent company Enbridge on Dec. 17. We are reaffirming our wide moat and stable moat trend ratings for Spectra and Enbridge. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.111 unit exchange ratio and our CAD 62 per share fair value estimate for Enbridge. The market is valuing Spectra in line with the i...
- Travis Miller
Enbridge Represents More Diversified Energy Exposure for Spectra Unith...
We are cutting our fair value estimate for Spectra Energy Partners to $52 per unit from $54 after incorporating a cut in our fair value estimate for parent company Enbridge. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.111 unit-exchange ratio and our new $47 per share fair value estimate for Enbridge. We assume the deal will close by year-end, in line with management's plans. We are reaffirming our wide moat and stable moat trend ratings for S...
- Travis Miller
Spectra Unitholders Face Lower Cash Payments in 2019, but Enbridge Gro...
We are reaffirming our $52 per unit fair value estimate for Spectra Energy Partners as the company moves toward closing its consolidation with parent company Enbridge on Dec. 17. We are reaffirming our wide moat and stable moat trend ratings for Spectra and Enbridge. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.111 unit exchange ratio and our CAD 62 per share fair value estimate for Enbridge. The market is valuing Spectra in line with the im...
- Travis Miller
Morningstar | Spectra Energy Partners Consolidation With Enbridge Set ...
We are cutting our fair value estimate for Spectra Energy Partners to $52 per unit from $54 after incorporating a cut in our fair value estimate for parent company Enbridge. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.111 unit-exchange ratio and our new $47 per share fair value estimate for Enbridge. We assume the deal will close by year-end, in line with management's plans. We are reaffirming our wide moat and stable moat trend ratings for ...
- Travis Miller
Morningstar | Spectra Energy Partners Consolidation With Enbridge Set ...
We are cutting our fair value estimate for Spectra Energy Partners to $52 per unit from $54 after incorporating a cut in our fair value estimate for parent company Enbridge. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.111 unit-exchange ratio and our new $47 per share fair value estimate for Enbridge. We assume the deal will close by year-end, in line with management's plans. We are reaffirming our wide moat and stable moat trend ratings for ...
- Travis Miller
Spectra Energy Partners Consolidation With Enbridge Set to Close By Ye...
We are cutting our fair value estimate for Spectra Energy Partners to $52 per unit from $54 after incorporating a cut in our fair value estimate for parent company Enbridge. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.111 unit-exchange ratio and our new $47 per share fair value estimate for Enbridge. We assume the deal will close by year-end, in line with management's plans. We are reaffirming our wide moat and stable moat trend ratings for S...
- Travis Miller
Morningstar | Investing in the Efficient Scale Moat Source
Efficient scale typically applies to firms that serve a market of limited size, in which potential competitors have little incentive to enter because doing so would lower the industry’s returns below the cost of capital. Although we observe efficient scale across nearly every sector, it is most common in highly regulated and capital-intensive industries, such as regulated utilities, telecom services, midstream oil and gas, REITs, and railroads. Compared with companies that benefit from other ...
- Travis Miller
Investing in the Efficient Scale Moat Source
Efficient scale typically applies to firms that serve a market of limited size, in which potential competitors have little incentive to enter because doing so would lower the industry’s returns below the cost of capital. Although we observe efficient scale across nearly every sector, it is most common in highly regulated and capital-intensive industries, such as regulated utilities, telecom services, midstream oil and gas, REITs, and railroads. Compared with companies that benefit from other m...
- Travis Miller
Morningstar | The Efficient Scale Moat Source Is Built on the Presence...
Efficient scale is perhaps the least intuitive of the five moat sources that Morningstar identifies as drivers of sustainable competitive advantage. It typically applies to firms that serve a market of limited size, in which potential competitors have little incentive to enter because doing so would lower the industry’s returns below the cost of capital. We highlight eight distinct market characteristics that can indicate the presence of efficient scale. Although we observe efficient scale ac...
- Travis Miller
The Efficient Scale Moat Source Is Built on the Presence of Distinct I...
Efficient scale is perhaps the least intuitive of the five moat sources that Morningstar identifies as drivers of sustainable competitive advantage. It typically applies to firms that serve a market of limited size, in which potential competitors have little incentive to enter because doing so would lower the industry’s returns below the cost of capital. We highlight eight distinct market characteristics that can indicate the presence of efficient scale. Although we observe efficient scale acr...
- Travis Miller
Morningstar | Spectra Energy Partners Gets a Boost From Enbridge; Rais...
We are raising our fair value estimate for Spectra Energy Partners to $54 per unit from $49 after Enbridge announced that it was raising its proposed exchange ratio to acquire the 17% stake in Spectra that it does not already own. The new offer gives Spectra unitholders 1.111 shares of Enbridge for every Spectra unit, a 9.8% increase from Enbridge's previous share exchange offer in May. We continue to believe the companies will close the deal by year-end. Our new fair value estimate is based on...
- Travis Miller
Morningstar | Enbridge boosts exchange ratio, giving Spectra unitholde...
Spectra Energy Partners unitholders will probably become Enbridge shareholders by the end of 2018, substantially changing the fundamentals and risk in their investment. In May, Enbridge announced plans to acquire Spectra common unitholders' 17% stake in a unit-for-shares exchange.Spectra unitholders soon will own about 5% of Enbridge, a Canadian energy conglomerate primarily leveraged to oil markets. We expect there is little common unitholders can do to stop the deal given Enbridge's 83% owners...
- Travis Miller
Enbridge boosts exchange ratio, giving Spectra unitholders more value.
We are reaffirming our $48 fair value estimate and wide moat and stable moat trend ratings after Spectra Energy Partners reported $574 million of ongoing EBITDA and $402 million of distributable cash flow in the second quarter, both up from the same quarter last year. Results are on track to meet our full-year estimates. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.0123 unit-exchange ratio and our $49 per share fair value estimate for Enbridge...
- Travis Miller
Spectra Energy Partners Gets a Boost From Enbridge; Raising FVE
We are raising our fair value estimate for Spectra Energy Partners to $54 per unit from $49 after Enbridge announced that it was raising its proposed exchange ratio to acquire the 17% stake in Spectra that it does not already own. The new offer gives Spectra unitholders 1.111 shares of Enbridge for every Spectra unit, a 9.8% increase from Enbridge's previous share exchange offer in May. We continue to believe the companies will close the deal by year-end. Our new fair value estimate is based on ...
- Travis Miller
Morningstar | Enbridge presents a fundamental shift in Spectra unithol...
Spectra Energy Partners unitholders likely will become Enbridge shareholders by the end of 2018, substantially changing the fundamentals and risk in their investment. In May, Enbridge announced plans to acquire Spectra common unitholders' 17% stake in a unit-for-shares exchange. Spectra unitholders soon will own 4% of Enbridge, a Canadian energy conglomerate primarily leveraged to oil markets. We expect there is little common unitholders can do to stop the deal given Enbridge's 83% ownership.We ...
- Travis Miller
Enbridge presents a fundamental shift in Spectra unitholders' risk pro...
We are reaffirming our $48 fair value estimate and wide moat and stable moat trend ratings after Spectra Energy Partners reported $574 million of ongoing EBITDA and $402 million of distributable cash flow in the second quarter, both up from the same quarter last year. Results are on track to meet our full-year estimates. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.0123 unit-exchange ratio and our $49 per share fair value estimate for Enbridge...
- Travis Miller
Morningstar | Spectra Energy Partners Consolidation Moving Forward, Dr...
We are reaffirming our $48 fair value estimate and wide moat and stable moat trend ratings after Spectra Energy Partners reported $574 million of ongoing EBITDA and $402 million of distributable cash flow in the second quarter, both up from the same quarter last year. Results are on track to meet our full-year estimates. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.0123 unit-exchange ratio and our $49 per share fair value estimate for Enbridg...
- Travis Miller
Spectra Energy Partners Consolidation Moving Forward, Driving Valuatio...
We are reaffirming our $48 fair value estimate and wide moat and stable moat trend ratings after Spectra Energy Partners reported $574 million of ongoing EBITDA and $402 million of distributable cash flow in the second quarter, both up from the same quarter last year. Results are on track to meet our full-year estimates. Our fair value estimate continues to be based on Enbridge's proposed all-stock acquisition at a 1.0123 unit-exchange ratio and our $49 per share fair value estimate for Enbridge...
- Travis Miller
Morningstar | FERC Provides Relief for Interstate Natural Gas Pipeline...
The Federal Energy Regulatory Commission, or FERC, has now finalized its March proposal to incorporate the recent tax cuts enacted as well as the disallowance of a recovery of income taxes under a cost-of-service rate methodology for interstate natural gas pipelines. In response to substantial industry objections, FERC has softened the rulemaking effort considerably, in our view, while also providing the industry and investors with substantial clarity around the regulatory path forward, reducing...
- Travis Miller
FERC Provides Relief for Interstate Natural Gas Pipelines; No FVE Chan...
The Federal Energy Regulatory Commission, or FERC, has now finalized its March proposal to incorporate the recent tax cuts enacted as well as the disallowance of a recovery of income taxes under a cost-of-service rate methodology for interstate natural gas pipelines. In response to substantial industry objections, FERC has softened the rulemaking effort considerably, in our view, while also providing the industry and investors with substantial clarity around the regulatory path forward, reducing...
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