As one of Canada’s leading energy infrastructure companies, Enbridge Inc. (TSX:ENB) has an enviable position. Its extensive network of low-risk utility-like assets are well positioned to continue to support the company’s strong cash flows. Demand for energy, natural gas as well as renewables, is on the rise here in North America.
Here’s why Enbridge stock is a top Canadian energy stock to buy and hold forever.
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Record results and continued momentum
Since 2021, Enbridge’s revenue has increased almost 14%, and its cash flow from operations has increased 36%. Also, its business has become more diversified, predictable, and defensive. In its latest quarter, Enbridge reported record results. In fact, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted cash flow, and earnings per share (EPS) all hit records.
These results were driven by continued strong energy demand, which drove high utilization rates, and record throughput on Enbridge’s Mainline and Ingleside projects. In addition to this, Enbridge’s newly acquired U.S. utilities are going strong. Enbridge’s acquisition has given the company over 200 utility assets in four major jurisdictions and the steady cash flows that come with them.
Yet, this top Canadian energy stock is down almost 6% from its 2025 highs.
A 6% dividend yield
These cash flows have and will continue to support Enbridge stock’s dividend and dividend growth. In fact, just this last year, Enbridge posted its 30th year of consecutive dividend increases. Looking ahead, the company’s cash flows will become increasingly defensive and predictable. This is due to a few reasons.
Firstly, Enbridge’s business is benefitting from the addition of the U.S. utilities, a growing renewables business, and rising demand for liquified natural gas (LNG). Secondly, these businesses are such that the cash flows generated from them are highly predictable. As a result, over 98% of Enbridge’s EBITDA is regulated or take or pay.
Take or pay contracts include a provision that guarantees the seller a minimum portion of the agreed upon payment even if the buyer does not follow through with the purchase. Also, 80% of Enbridge’s EBITDA is inflation-protected.
So we can see how this earnings and cash flow profile would lend itself very well to a dividend stock to rely on.
Unprecedented demand for North American energy
As Enbridge’s management puts it, we are seeing “unprecedented demand for power generation across North America”. This is driving Enbridge’s record results. And the momentum is expected to continue.
In order to meet this demand for safe, reliable, and affordable energy, Enbridge is mostly turning to lower risk projects. This includes $3 billion of low-risk projects that have been completed year-to-date. It also includes a $2 billion investment in Mainline in order to support its operational health. Finally, it includes the expansion of Enbridge’s T-North system to support West Coast LNG.
For 2025, the company expects adjusted EBITDA to come in at $19.7 billion, a 9.4% increase over the prior year. This cash will be used to grow its dividend, fund its growth projects, and reduce debt and/or fund more growth projects.
EPS for 2025 is expected to come in at $2.94 versus $2.80, for a 5% growth rate.
