Intrinsic value of Enbridge Inc. - ENB

Previous Close

$46.10

  Intrinsic Value

$47.51

stock screener

  Rating & Target

hold

+3%

Previous close

$46.10

 
Intrinsic value

$47.51

 
Up/down potential

+3%

 
Rating

hold

We calculate the intrinsic value of ENB stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 77.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.70
  8.33
  8.00
  7.70
  7.43
  7.18
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.40
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
Revenue, $m
  37,567
  40,696
  43,950
  47,333
  50,849
  54,503
  58,299
  62,246
  66,350
  70,618
  75,060
  79,685
  84,502
  89,522
  94,756
  100,215
  105,913
  111,862
  118,077
  124,571
  131,360
  138,459
  145,887
  153,660
  161,796
  170,316
  179,239
  188,586
  198,381
  208,645
Variable operating expenses, $m
  7,099
  7,690
  8,305
  8,943
  9,607
  10,296
  11,013
  11,758
  12,533
  13,339
  14,169
  15,042
  15,952
  16,899
  17,887
  18,918
  19,994
  21,117
  22,290
  23,516
  24,797
  26,138
  27,540
  29,007
  30,543
  32,151
  33,836
  35,600
  37,449
  39,387
Fixed operating expenses, $m
  26,761
  27,350
  27,952
  28,566
  29,195
  29,837
  30,494
  31,164
  31,850
  32,551
  33,267
  33,999
  34,747
  35,511
  36,292
  37,091
  37,907
  38,741
  39,593
  40,464
  41,354
  42,264
  43,194
  44,144
  45,115
  46,108
  47,122
  48,159
  49,219
  50,301
Total operating expenses, $m
  33,860
  35,040
  36,257
  37,509
  38,802
  40,133
  41,507
  42,922
  44,383
  45,890
  47,436
  49,041
  50,699
  52,410
  54,179
  56,009
  57,901
  59,858
  61,883
  63,980
  66,151
  68,402
  70,734
  73,151
  75,658
  78,259
  80,958
  83,759
  86,668
  89,688
Operating income, $m
  3,706
  5,656
  7,694
  9,824
  12,047
  14,369
  16,793
  19,323
  21,967
  24,729
  27,624
  30,644
  33,803
  37,111
  40,576
  44,206
  48,013
  52,005
  56,194
  60,591
  65,208
  70,058
  75,153
  80,508
  86,138
  92,056
  98,281
  104,827
  111,713
  118,957
EBITDA, $m
  4,030
  6,006
  8,071
  10,229
  12,482
  14,835
  17,290
  19,854
  22,532
  25,330
  28,255
  31,313
  34,513
  37,863
  41,372
  45,048
  48,902
  52,944
  57,186
  61,637
  66,311
  71,221
  76,379
  81,799
  87,497
  93,487
  99,786
  106,411
  113,379
  120,710
Interest expense (income), $m
  1,820
  1,736
  1,975
  2,223
  2,482
  2,750
  3,029
  3,319
  3,621
  3,934
  4,260
  4,598
  4,951
  5,318
  5,700
  6,099
  6,514
  6,947
  7,400
  7,872
  8,365
  8,881
  9,419
  9,983
  10,572
  11,189
  11,835
  12,511
  13,220
  13,962
  14,739
Earnings before tax, $m
  1,970
  3,681
  5,471
  7,342
  9,297
  11,340
  13,473
  15,703
  18,033
  20,469
  23,026
  25,693
  28,485
  31,411
  34,477
  37,692
  41,065
  44,605
  48,322
  52,226
  56,327
  60,638
  65,170
  69,936
  74,948
  80,221
  85,769
  91,607
  97,751
  104,218
Tax expense, $m
  532
  994
  1,477
  1,982
  2,510
  3,062
  3,638
  4,240
  4,869
  5,527
  6,217
  6,937
  7,691
  8,481
  9,309
  10,177
  11,088
  12,043
  13,047
  14,101
  15,208
  16,372
  17,596
  18,883
  20,236
  21,660
  23,158
  24,734
  26,393
  28,139
Net income, $m
  1,438
  2,687
  3,994
  5,360
  6,787
  8,278
  9,836
  11,463
  13,164
  14,943
  16,809
  18,756
  20,794
  22,930
  25,168
  27,515
  29,978
  32,562
  35,275
  38,125
  41,119
  44,266
  47,574
  51,053
  54,712
  58,562
  62,612
  66,873
  71,359
  76,079

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  90,961
  98,538
  106,418
  114,609
  123,122
  131,968
  141,161
  150,717
  160,653
  170,989
  181,744
  192,942
  204,605
  216,760
  229,433
  242,652
  256,448
  270,853
  285,900
  301,624
  318,062
  335,253
  353,237
  372,057
  391,758
  412,386
  433,992
  456,625
  480,340
  505,195
Adjusted assets (=assets-cash), $m
  90,961
  98,538
  106,418
  114,609
  123,122
  131,968
  141,161
  150,717
  160,653
  170,989
  181,744
  192,942
  204,605
  216,760
  229,433
  242,652
  256,448
  270,853
  285,900
  301,624
  318,062
  335,253
  353,237
  372,057
  391,758
  412,386
  433,992
  456,625
  480,340
  505,195
Revenue / Adjusted assets
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
Average production assets, $m
  1,578
  1,709
  1,846
  1,988
  2,136
  2,289
  2,449
  2,614
  2,787
  2,966
  3,153
  3,347
  3,549
  3,760
  3,980
  4,209
  4,448
  4,698
  4,959
  5,232
  5,517
  5,815
  6,127
  6,454
  6,795
  7,153
  7,528
  7,921
  8,332
  8,763
Working capital, $m
  -1,728
  -1,872
  -2,022
  -2,177
  -2,339
  -2,507
  -2,682
  -2,863
  -3,052
  -3,248
  -3,453
  -3,666
  -3,887
  -4,118
  -4,359
  -4,610
  -4,872
  -5,146
  -5,432
  -5,730
  -6,043
  -6,369
  -6,711
  -7,068
  -7,443
  -7,835
  -8,245
  -8,675
  -9,126
  -9,598
Total debt, $m
  44,888
  50,533
  56,403
  62,506
  68,848
  75,438
  82,287
  89,406
  96,809
  104,509
  112,522
  120,864
  129,553
  138,608
  148,049
  157,898
  168,176
  178,908
  190,117
  201,832
  214,078
  226,885
  240,283
  254,304
  268,982
  284,350
  300,446
  317,308
  334,976
  353,492
Total liabilities, $m
  67,766
  73,411
  79,281
  85,384
  91,726
  98,316
  105,165
  112,284
  119,687
  127,387
  135,400
  143,742
  152,431
  161,486
  170,927
  180,776
  191,054
  201,786
  212,995
  224,710
  236,956
  249,763
  263,161
  277,182
  291,860
  307,228
  323,324
  340,186
  357,854
  376,370
Total equity, $m
  23,195
  25,127
  27,137
  29,225
  31,396
  33,652
  35,996
  38,433
  40,967
  43,602
  46,345
  49,200
  52,174
  55,274
  58,505
  61,876
  65,394
  69,068
  72,904
  76,914
  81,106
  85,489
  90,075
  94,875
  99,898
  105,159
  110,668
  116,439
  122,487
  128,825
Total liabilities and equity, $m
  90,961
  98,538
  106,418
  114,609
  123,122
  131,968
  141,161
  150,717
  160,654
  170,989
  181,745
  192,942
  204,605
  216,760
  229,432
  242,652
  256,448
  270,854
  285,899
  301,624
  318,062
  335,252
  353,236
  372,057
  391,758
  412,387
  433,992
  456,625
  480,341
  505,195
Debt-to-equity ratio
  1.940
  2.010
  2.080
  2.140
  2.190
  2.240
  2.290
  2.330
  2.360
  2.400
  2.430
  2.460
  2.480
  2.510
  2.530
  2.550
  2.570
  2.590
  2.610
  2.620
  2.640
  2.650
  2.670
  2.680
  2.690
  2.700
  2.710
  2.730
  2.730
  2.740
Adjusted equity ratio
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,438
  2,687
  3,994
  5,360
  6,787
  8,278
  9,836
  11,463
  13,164
  14,943
  16,809
  18,756
  20,794
  22,930
  25,168
  27,515
  29,978
  32,562
  35,275
  38,125
  41,119
  44,266
  47,574
  51,053
  54,712
  58,562
  62,612
  66,873
  71,359
  76,079
Depreciation, amort., depletion, $m
  323
  350
  377
  405
  435
  466
  498
  531
  565
  601
  631
  669
  710
  752
  796
  842
  890
  940
  992
  1,046
  1,103
  1,163
  1,225
  1,291
  1,359
  1,431
  1,506
  1,584
  1,666
  1,753
Funds from operations, $m
  1,762
  3,037
  4,371
  5,765
  7,222
  8,744
  10,333
  11,994
  13,729
  15,544
  17,439
  19,425
  21,504
  23,682
  25,964
  28,357
  30,867
  33,501
  36,267
  39,171
  42,222
  45,429
  48,800
  52,344
  56,071
  59,992
  64,117
  68,457
  73,025
  77,832
Change in working capital, $m
  -138
  -144
  -150
  -156
  -162
  -168
  -175
  -182
  -189
  -196
  -204
  -213
  -222
  -231
  -241
  -251
  -262
  -274
  -286
  -299
  -312
  -327
  -342
  -358
  -374
  -392
  -410
  -430
  -451
  -472
Cash from operations, $m
  1,900
  3,181
  4,521
  5,921
  7,384
  8,912
  10,508
  12,175
  13,918
  15,740
  17,644
  19,638
  21,726
  23,913
  26,205
  28,608
  31,129
  33,775
  36,553
  39,470
  42,535
  45,756
  49,141
  52,701
  56,446
  60,384
  64,528
  68,887
  73,475
  78,304
Maintenance CAPEX, $m
  -292
  -316
  -342
  -369
  -398
  -427
  -458
  -490
  -523
  -557
  -593
  -631
  -669
  -710
  -752
  -796
  -842
  -890
  -940
  -992
  -1,046
  -1,103
  -1,163
  -1,225
  -1,291
  -1,359
  -1,431
  -1,506
  -1,584
  -1,666
New CAPEX, $m
  -117
  -131
  -137
  -142
  -148
  -153
  -159
  -166
  -172
  -179
  -187
  -194
  -202
  -211
  -220
  -229
  -239
  -250
  -261
  -273
  -285
  -298
  -312
  -326
  -342
  -358
  -375
  -393
  -411
  -431
Cash from investing activities, $m
  -409
  -447
  -479
  -511
  -546
  -580
  -617
  -656
  -695
  -736
  -780
  -825
  -871
  -921
  -972
  -1,025
  -1,081
  -1,140
  -1,201
  -1,265
  -1,331
  -1,401
  -1,475
  -1,551
  -1,633
  -1,717
  -1,806
  -1,899
  -1,995
  -2,097
Free cash flow, $m
  1,491
  2,734
  4,042
  5,410
  6,838
  8,331
  9,890
  11,520
  13,223
  15,003
  16,864
  18,813
  20,854
  22,992
  25,233
  27,583
  30,048
  32,635
  35,352
  38,205
  41,203
  44,354
  47,666
  51,150
  54,813
  58,667
  62,722
  66,989
  71,480
  76,207
Issuance/(repayment) of debt, $m
  5,437
  5,645
  5,871
  6,103
  6,342
  6,590
  6,849
  7,119
  7,403
  7,700
  8,013
  8,342
  8,689
  9,055
  9,441
  9,848
  10,278
  10,732
  11,210
  11,714
  12,246
  12,807
  13,398
  14,021
  14,677
  15,368
  16,096
  16,862
  17,668
  18,516
Issuance/(repurchase) of shares, $m
  371
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  5,808
  5,645
  5,871
  6,103
  6,342
  6,590
  6,849
  7,119
  7,403
  7,700
  8,013
  8,342
  8,689
  9,055
  9,441
  9,848
  10,278
  10,732
  11,210
  11,714
  12,246
  12,807
  13,398
  14,021
  14,677
  15,368
  16,096
  16,862
  17,668
  18,516
Total cash flow (excl. dividends), $m
  7,298
  8,379
  9,913
  11,512
  13,180
  14,921
  16,739
  18,639
  20,625
  22,703
  24,877
  27,155
  29,543
  32,047
  34,674
  37,431
  40,326
  43,367
  46,562
  49,920
  53,449
  57,161
  61,065
  65,171
  69,490
  74,035
  78,818
  83,851
  89,148
  94,723
Retained Cash Flow (-), $m
  -1,809
  -1,932
  -2,009
  -2,089
  -2,171
  -2,256
  -2,344
  -2,437
  -2,534
  -2,636
  -2,743
  -2,855
  -2,974
  -3,099
  -3,232
  -3,371
  -3,518
  -3,673
  -3,837
  -4,010
  -4,192
  -4,384
  -4,586
  -4,799
  -5,024
  -5,260
  -5,509
  -5,771
  -6,047
  -6,338
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  5,489
  6,446
  7,903
  9,423
  11,010
  12,666
  14,395
  16,202
  18,092
  20,068
  22,134
  24,300
  26,569
  28,948
  31,443
  34,061
  36,808
  39,694
  42,725
  45,910
  49,258
  52,777
  56,479
  60,371
  64,467
  68,775
  73,309
  78,080
  83,101
  88,385
Discount rate, %
  9.70
  10.19
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.38
  29.79
  31.28
  32.85
  34.49
  36.21
  38.03
  39.93
PV of cash for distribution, $m
  5,004
  5,310
  5,827
  6,156
  6,306
  6,288
  6,119
  5,822
  5,420
  4,940
  4,408
  3,852
  3,294
  2,756
  2,255
  1,802
  1,406
  1,070
  793
  572
  402
  274
  181
  116
  71
  43
  25
  14
  7
  4
Current shareholders' claim on cash, %
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5

Enbridge Inc. is a Canada-based energy transportation and distribution company. The Company is engaged in delivering energy. It operates through five segments: Liquids Pipelines, Gas Distribution, Gas Pipelines and Processing, Green Power and Transmission, and Energy Services. Liquids Pipelines consists of common carrier and contract crude oil, natural gas liquids (NGL), and refined products pipelines and terminals, including Canadian Mainline, Lakehead Pipeline System, Mid-Continent and Gulf Coast and Regional Oil Sands System. Gas Distribution consists of its natural gas utility operations, the core of which is Enbridge Gas Distribution Inc. Green Power and Transmission consists of its investments in renewable energy assets and transmission facilities. Renewable energy assets consist of wind, solar, geothermal and waste heat recovery facilities in Canada. Energy Services undertake physical commodity marketing activity and logistical services, and oversee refinery supply services.

FINANCIAL RATIOS  of  Enbridge Inc. (ENB)

Valuation Ratios
P/E Ratio 21
Price to Sales 1.3
Price to Book 2
Price to Tangible Book
Price to Cash Flow 8.3
Price to Free Cash Flow -988
Growth Rates
Sales Growth Rate 2.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -28.7%
Cap. Spend. - 3 Yr. Gr. Rate -9.1%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 170.6%
Total Debt to Equity 191.5%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.5%
Ret/ On Assets - 3 Yr. Avg. -8.4%
Return On Total Capital 3.3%
Ret/ On T. Cap. - 3 Yr. Avg. 2.3%
Return On Equity 10.3%
Return On Equity - 3 Yr. Avg. 7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 30.5%
Gross Margin - 3 Yr. Avg. 25.8%
EBITDA Margin 18.8%
EBITDA Margin - 3 Yr. Avg. 14.7%
Operating Margin 7.5%
Oper. Margin - 3 Yr. Avg. 7.2%
Pre-Tax Margin 7.1%
Pre-Tax Margin - 3 Yr. Avg. 4.3%
Net Profit Margin 6%
Net Profit Margin - 3 Yr. Avg. 3.5%
Effective Tax Rate 5.8%
Eff/ Tax Rate - 3 Yr. Avg. 526.5%
Payout Ratio 69.7%

ENB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENB stock intrinsic value calculation we used $34560 million for the last fiscal year's total revenue generated by Enbridge Inc.. The default revenue input number comes from 2016 income statement of Enbridge Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ENB stock valuation model: a) initial revenue growth rate of 8.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.7%, whose default value for ENB is calculated based on our internal credit rating of Enbridge Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Enbridge Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ENB stock the variable cost ratio is equal to 18.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $26185 million in the base year in the intrinsic value calculation for ENB stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Enbridge Inc..

Corporate tax rate of 27% is the nominal tax rate for Enbridge Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ENB stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ENB are equal to 4.2%.

Life of production assets of 0.7 years is the average useful life of capital assets used in Enbridge Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ENB is equal to -4.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $21386 million for Enbridge Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1687.14 million for Enbridge Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Enbridge Inc. at the current share price and the inputted number of shares is $77.8 billion.

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