Enbridge Inc. (ENB) on Friday raised its quarterly dividend to 49 cents a share, the company’s highest quarterly payout in 14 years, and authorized up to $1.1 billion in new capital projects.
The largest pipeline operator in North America also said that it will buy back up to $400 million in shares over the next year.
The Calgary-based company’s shares rose 2.4 percent to close at $48.64.
Enbridge Inc. and its subsidiary Enbridge Energy Partners Inc. said earlier this week that they would cut their shared executive pay by as much as 90 percent under pressure from its investor base, which had called for better disclosure in response to the fallout of last year’s surprise double bankruptcy of two of the oil sands developer’s major units.
In a regulatory filing Friday, Enbridge Inc. said it approved up to $1.1 billion in spending, including some of the money it plans to use for stock buybacks, on six key projects in the energy space, including pipelines, terminals and projects in liquefied natural gas.
In addition, the company raised its quarterly dividend to 49 cents per share, payable on June 29 to shareholders of record at the close of business on June 1. The quarterly dividend is payable twice a year, first in December and second in June. The stock’s ex-dividend date is May 30.
“Enbridge’s dividend is now the largest in the Canadian energy pipeline industry,” Michael Krimbel, vice president of corporate communications, said in a statement. “As always, our priority is to provide a predictable and growing dividend, and today’s dividend increase and share buyback demonstrates that our strategy is delivering value for shareholders.”
One of the five projects is Energy Transfer Partners’ Sunoco Logistics Partners LP (ETP) general partner (ETLP) acquisition, to bring operating revenues to Enbridge. Enbridge received approval from the U.S. Justice Department to proceed with the deal.
As part of the terms of the acquisition, Enbridge will pay up to $6.8 billion to ETP and its limited partners. Based on ETP’s current stock price, Enbridge will pay $46.19 a share to ETP’s limited partners and $39.40 a share to ETP’s general partner. The deal is expected to close later this year.