A proven strategy to derive inflation-beating returns over time is to buy and hold quality dividend stocks. Ideally, the dividend stocks you own should generate stable cash flows, allowing them to maintain these payouts across market cycles. Moreover, the company’s cash flows should increase steadily, translating to consistent dividend hikes that enhance your yield at cost over time.
One such TSX dividend stock that has already delivered market-beating returns to long-term shareholders is Enbridge (TSX:ENB). A diversified energy infrastructure heavyweight, ENB stock has returned 1,550% to shareholders since January 1995. However, if we account for dividend reinvestments, cumulative returns are closer to 6,160%.
Despite its outsized gains, the TSX stock currently offers you a forward yield of 6.3%, which is quite tasty. Let’s see if it still makes sense to own Enbridge stock at the current valuation.
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Is the TSX dividend stock still a good buy?
Enbridge posted better-than-expected fourth-quarter (Q4) results and raised its dividend despite regulatory challenges facing its pipeline expansion projects.
Enbridge reported record Q4 and full-year earnings, with EBITDA (earnings before interest, tax, depreciation, and amortization) increasing by over $1 billion in Q4 compared to the same period last year. The energy infrastructure giant saw its DCF (distributable cash flow) per share rise by 10% to $1.41, while adjusted earnings per share grew 17% to $0.75.
“We delivered record EBITDA and DCF per share in 2024 with new assets and continued customer demand contributing to a 13% increase in EBITDA over 2023,” said Chief Executive Officer Greg Ebel, highlighting Enbridge’s achievement of hitting its financial guidance for the 19th consecutive year.
Enbridge increased its dividend for the 30th consecutive year in December, maintaining its status as one of the only dividend knights in the midstream sector. Notably, ENB stock also delivered a 37% total shareholder return to investors in 2024.
The Liquids Pipeline business experienced record annual volumes on several key assets, with the Mainline averaging throughput of 3.1 million barrels per day despite TMX entering service. The system has been in apportionment since November, reflecting continued strong demand.
Enbridge’s Gas Transmission business saw high utilization throughout 2024, with the company reporting several throughput records in January 2025. The U.S. transmission system recorded its two highest delivery days ever, supported by all-time highs on multiple pipelines.
Enbridge closed the purchase of three U.S. natural gas utilities on the acquisition front, creating North America’s largest gas utility franchise, now serving over seven million customers. It also announced three strategic tuck-in acquisitions of Permian and Gulf Coast assets.
Chief Financial Officer Pat Murray reaffirmed the company’s 2025 guidance, projecting adjusted EBITDA between $19.4 billion and $20 billion, with DCF per share of $5.50 to $5.90. Enbridge’s capital backlog now stands at $26 billion, with $5 billion of assets placed into service in 2024 and $8 billion of newly sanctioned projects added through 2029.
The Foolish takeaway
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Enbridge | $59.92 | 1,327 | $0.9425 | $1,250 | Quarterly |
Today, Enbridge offers an annual dividend of $3.77 per share. So, to earn $5,000 in annual dividends, you should own 1,327 shares of Enbridge. At the current price, it would cost you close to $79,000, which is significant for the majority of Canadian investors. So, it’s advisable to identify other blue-chip dividend-growth stocks with strong fundamentals to diversify your portfolio and lower overall risk.
