In This Article:
Key Takeaways
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Shares of Enbridge, the oil and gas transportation leader with pipelines in 31 states, hit a high of $44.74.
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ENB is a Dividend Aristocrat, with a dividend yield of almost 6% and 30 straight years of dividend growth.
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ENB stock is relatively overvalued, trading at a trailing 12-month enterprise value to EBITDA of 17.18x.
Enbridge Inc. ENB soared to an impressive intraday high of $44.74 per share in the last trading session, hitting a 52-week high. The surge reflects investor enthusiasm for the midstream giant's secured projects in liquids pipelines, gas transmission and renewable power generation. These ventures are poised to fuel Enbridge's robust core earnings and fortify its leadership in energy infrastructure.
The key question now is whether investors should capitalize on the momentum. Before offering any investment advice, let's first take a closer look at the company’s fundamentals.
ENB’s Resilience & Visionary Pipeline Sparks Expansion
Enbridge is a leading midstream energy player in North America, operating an extensive crude oil and liquids transportation network spanning 18,085 miles — the world's longest and most complex system. ENB’s gas transportation pipeline network spans 71,308 miles, covering 31 U.S. states, four Canadian provinces and offshore areas in the Gulf of Mexico.
Enbridge’s pipelines transport 20% of the total natural gas consumed in the United States. The company generates stable, fee-based revenues from these midstream assets, as they are booked by shippers on a long-term basis, minimizing commodity price volatility and volume risks.
The midstream energy major generates incremental cash flows from its C$27 billion backlog of secured capital projects, which include liquids pipelines, gas transmission, gas distribution and storage, and renewables. The maximum in-service date is 2029.
ENB’s Strong Dividends and Growing DCF Enhance Appeal
Enbridge prioritizes returning capital to shareholders, as evidenced by 30 consecutive years of dividend growth, earning its status as a dividend aristocrat. Currently, ENB offers a dividend yield of almost 6%, which is higher than the 5% of the composite stocks in the industry.
Considering its substantial backlog of midstream growth projects, Enbridge is expected to continue rewarding shareholders with attractive dividend payments. The company expects its distributable cash flow (DCF) per share from 2021 through 2025 to witness a compound annual growth rate of 4%. This increase indicates that Enbridge is well-positioned to sustain and grow its dividend payouts.