Enbridge Inc (NYSE:ENB) raised its quarterly dividend for its common stock by 33%, and announced a restructuring plan as part of its initiative to enhance value for shareholders.
The announcement of Enbridge Inc (NYSE:ENB) drove its stock higher by more than 11% to $53.41 per share at the time of this writing, around 12:27 in the afternoon in New York.
According to the energy pipeline company, its next quarterly dividend will increase to $0.46 per share, which will be payable on March 1, 2015 to shareholders on record on February 16.
Enbridge approves new dividend payout policy range
The board of directors of Enbridge Inc (NYSE:ENB) approved a revised dividend payout policy range of 75% to 85% of adjusted earnings. Its previous payout policy range was 60% to 70%.
According to the company, the payout rate is expected to increase in the lower end of the new range next year and to the higher end by 2018. Enbridge estimated that its annual dividend growth rate will be around 14% to 16% between 2015 and 2018.
Enbridge Inc (NYSE:ENB) expected to deliver EPS in the range of $2.05 to $2.35 per share for 2015.
Enbridge to transfer Canadian pipeline unit to income fund
The company plans to transfer its Canadian Liquids Pipelines business to its Canadian affiliate Enbridge Income Fund (EIF). The total value of the assets that will be transferred is around $17 billion.
The Enbridge Income Fund Holdings Inc (TSE:ENF) is expected to generate increasing interest from the assets through investments in the equity of EIF for several years in amounts consistent with its equity funding ability.
Al Monaco, CEO if Enbridge Inc (NYSE:ENB) said, “Our plan to transfer the Canadian Liquids Pipelines business to Enbridge Income Fund comes after an extensive review of the potential to further enhance the value of our $44 billion growth program and lower the cost of funding for that program and for new investment opportunities.”
Monaco added, “We believe that the drop down of our Canadian Liquids Pipelines business into the Fund will transform it into a high growth vehicle and be beneficial for shareholders of both Enbridge and Enbridge Income Fund Holdings, while continuing to assure the funding of our organic growth program.”
