Investing in the stock market can sometimes feel like navigating a winding road, with unexpected turns and dips that can unsettle even the most seasoned investors. One company that has recently caught the attention of market watchers is Enbridge (TSX: ENB), especially after surging 30% in the last year alone. With its stock trading below $65, many are pondering: is this the opportune moment to invest in Enbridge?
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Into earnings
Enbridge stands as a titan in North America’s energy infrastructure landscape. It operates the continent’s largest crude oil pipeline network, transporting approximately 40% of U.S.-bound Canadian crude. Beyond oil, Enbridge stock has a significant presence in natural gas transmission and distribution and is making notable strides in renewable energy projects. This diversified portfolio positions the company to weather the often volatile energy sector.
In the fourth quarter of 2024, Enbridge stock reported adjusted earnings of $1.02 billion, up from $719 million in the same period the previous year. This increase was largely attributed to higher tolls on its pipelines and doubled income from its utilities segment. The company’s Mainline system saw a 3% rise in adjusted core profit to $1.34 billion, thanks to a 6% increase in toll pricing. Furthermore, Enbridge’s natural gas transmission segment experienced a 17% rise in core profit, partly due to favourable contracting and lower operating costs on its U.S. assets.
Ongoing issues
Despite these robust financials, Enbridge’s stock price has dipped below $50 in the not-too-distant past. This decline could be due to a mix of market volatility, energy sector fluctuations, and broader economic concerns. However, for those with a long-term investment horizon, this dip might present a golden opportunity. And the rise to $63 at writing could mean a rebound is underway.
Meanwhile, one of Enbridge stock’s standout features is its commitment to paying consistent dividends. In December 2024, the company announced a 3.0% increase in its dividend per share, raising the quarterly dividend to $0.9425. This translates into an annualized dividend of $3.77 per share for 2025. Over the past 30 years, Enbridge’s dividend has grown at an average compound annual growth rate of 9%. This dedication to returning value to shareholders showcases confidence in its cash flow and financial stability.
Future outlook
Looking ahead, Enbridge’s future appears promising. The company has a backlog of projects worth $26 billion, indicating ongoing growth initiatives. Additionally, it doesn’t anticipate significant impacts from impending U.S. tariffs, suggesting resilience in its operations. Chief Executive Officer Greg Ebel noted that global oil consumption has rebounded to all-time highs.
Plus, increasing natural gas demand is being driven by LNG growth, coal-to-gas switching, and the rapid increase in electric power demand stemming from new data centre developments. Thus, Enbridge’s portfolio is well-suited to capitalize on this increased energy demand.
Bottom line
When considering adding Enbridge stock to your portfolio, it’s essential to align this move with your investment goals and risk tolerance. While the current stock price may seem appealing, conducting thorough research or consulting with a financial advisor is always a wise approach.
All together, Enbridge stock trading below $65, combined with its strong financial performance and consistent dividend history, may offer a compelling opportunity for investors. However, as with any investment, it’s vital to assess all factors and make informed decisions based on your individual financial situation.
