Enbridge's Consistent Performance: A 6% Yielding Dividend Stock

Enbridge (ENB) operates a highly predictable business model that focuses on pipeline and utility assets. These operations generate steady cash flow supported by long-term contracts and regulated cost-of-service frameworks.

Enbridge's consistent performance is impressive, as it has met its annual financial guidance for 19 consecutive years. This achievement is notable considering various challenges, including financial crises, drops in commodity prices, wildfires in key oil-producing regions of Canada, a global pandemic, and increasing inflation.

In the previous year, the company showcased strong performance by seizing a unique opportunity to acquire several high-quality natural gas utilities in the U.S. This strategic move places Enbridge in a robust position to continue increasing its earnings and cash flow, which assures investors of its attractive 6%-yielding dividend.

A Historic Year for Enbridge

During the fourth-quarter earnings announcement, CEO Greg Ebel referred to 2024 as "a historic year for Enbridge." The company reported a 13% growth in EBITDA (earnings before interest, taxes, depreciation, and amortization), totaling $13.3 billion. Additionally, its distributable cash flow (DCF) increased by 6% to reach $8.5 billion. The key factor behind this growth was the completion of what Ebel described as a "once in a generation" acquisition of three leading U.S. gas distribution companies, valued at CA$19 billion ($13.4 billion). This acquisition positions Enbridge as the owner of the largest natural gas utility franchise in North America and aligns well with its existing low-risk business model, meeting the growing demand for natural gas.

Enbridge also benefitted from the startup of $3.5 billion worth of organic expansion projects last year across its core operations, which include liquids pipelines, gas transmission, gas distribution, and renewable power. Furthermore, the company completed three smaller acquisitions to enhance its natural gas presence in the Permian Basin and fortify the position of its Ingleside Energy Center, a crucial crude oil export terminal.

Growth Prospects Ahead

Thanks to its significant investments, Enbridge is poised for continued growth heading into 2025. The company expects its adjusted EBITDA to reach between $13.7 billion and $14.2 billion, reflecting an increase of 8% to 11%. It also projects a DCF per share growth of up to 5.4%, although this figure may be slightly impacted due to tax legislation challenges and dilution from its utility acquisitions.

This upward momentum is likely to persist into 2026 and beyond, as Enbridge approved $5.7 billion in new organic expansion projects last year, further bolstering its long-term growth potential. Some notable projects include:

• Tennessee Ridgeline: A $1.1 billion expansion of the Tennessee Natural Gas system, set to supply a new natural gas power plant expected to come online next year.
• Gulf of Mexico: Initiatives to support the Kaskida project by BP and the Sparta initiative by Shell and Equinor, anticipated for completion in 2029.
• North Carolina Gas Distribution: The utility acquisition includes key growth initiatives in North Carolina, such as the Moriah Energy Center, a liquefied natural gas facility, and the T15 Reliability Project, which connects to Duke Energy's gas-fired power plant.
• Solar Projects: Enbridge is building three major U.S. solar energy projects with long-term agreements from Amazon, AT&T, and Toyota that are due to launch next year.

These initiatives expand Enbridge's project backlog and enhance its growth outlook. As of 2025, the company has $18.4 billion in projects underway, which will start commercial operations throughout the decade, supporting an anticipated annual DCF per share growth of 3% to 5% over the next few years. This growth potential offers Enbridge the ability to continue increasing its high-yielding dividend, which has been consistently raised for 30 straight years.

A Steady and Reliable Investment

Enbridge's low-risk business model, consisting of pipeline and utility assets, generates reliable earnings and provides a stable cash flow for distributing an attractive dividend. The company continues to demonstrate strong growth prospects ahead, making it an appealing stock for those seeking a dependable income stream.

Enbridge, Dividend, Growth