Enbridge Inc. (TSX:ENB)(NYSE:ENB) has made many of its long-term shareholders quite rich, and investors want to know if the trend is set to continue.

Let’s take a look at the current situation to see if this stock should go in your portfolio today.


Enbridge generated adjusted earnings of $1.25 per share for the first half of 2016 compared to $1.15 per share in the same period last year.

Available cash flow from operations rose from $1.91 to $2.21 per share, and full-year guidance remains at $3.80-4.50 per share.

The strong results show the resilience of Enbridge’s business in the face of challenging conditions, especially in Q2 when the forest fires in Alberta forced the shutdown of oil sands operators.

Business model

Enbridge is an energy infrastructure company, not a producer, so its revenue stream isn’t particularly impacted by volatility in oil prices. In fact, less than 3% of the company’s earnings as of June 30 was subject to market-price risks.

Most of Enbridge’s contracts are negotiated with large, stable companies and 95% of cash flow comes from long-term commercial agreements. The company’s assets essentially act as tollbooths, and the main concern is throughput, not commodity prices.

Oil sands operators are facing some tough market conditions, but they continue to produce at significant levels. Enbridge reported record throughput on the mainline system in Q1, and, while there were interruptions due to the wildfires in Q2, investors should see the Q3 numbers show a return to pre-fire levels.

Growth opportunities

Enbridge finished Q2 2016 with $16 billion in near-term secured capital projects that are scheduled for completion by 2019.

The recent announcement of the company’s US$37 billion purchase of Spectra Energy adds an additional $10 billion in projects currently in execution and boosts the overall development inventory to $74 billion.

Enbridge is also picking up extensive natural gas infrastructure in Canada and the United States.

Combined, the new business will be the largest energy infrastructure company in North America with an enterprise value of $165 billion.

Dividend gains

Enbridge has a strong track record of dividend growth, and that is set to continue. Additional cash flow generated by the near-term projects will support a 15% dividend hike in 2017, and Enbridge expects to raise the payout by at least 10% per year from 2018 to 2024.

The current distribution yields 3.7%

Should you buy?

The stock has already gained 25% this year, so there might be limited gains on the horizon over the short term. However, Enbridge remains a top pick for dividend-growth investors, and those who buy today can still expect decent returns in the coming years.

Past performance is no guarantee of future gains, but this stock tends to reward those who buy and hold for the long haul. A $10,000 investment in Enbridge 20 years ago would be worth $346,000 today with the dividends reinvested.

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Let’s not beat around the bush – energy companies performed miserably in 2015. Yet, even though the carnage was widespread, not all energy-related businesses were equally affected.

We've identified an energy company we think offers one of the best growth opportunities around. While this company is largely tied to the production of natural gas, it doesn't actually produce the gas. Instead, it provides the equipment required to get natural gas from the ground to the end user. With diversified operations around the globe, we think it's a rare find in the industry.

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Fool contributor Andrew Walker has no position in any stocks mentioned. The Motley Fool owns shares of Spectra Energy. Spectra Energy is a recommendation of Stock Advisor Canada.