Enbridge (TSX:ENB) has been a go-to for Canadian income investors for decades, but even with its massive scale and market presence, much of its real value is still flying under the radar. The dividend stock climbed over 20% in the past year, powered by a mix of record operating results, disciplined expansion, and a backlog that rivals the size of some entire competitors. Yet the market often focuses on its debt load or slower share price moves, overlooking the combination of stability and growth potential baked into its portfolio.
Source: Getty Images
What happened
The second quarter of 2025 was a reminder of what this dividend stock can do. Enbridge posted record quarterly earnings before interest, taxes, depreciation, and amortization (EBITDA) of $4.6 billion. That’s up 7% year over year, with adjusted earnings per share (EPS) rising to $0.65 from $0.58. Operating cash flow reached $3.2 billion, and distributable cash flow held steady at $2.9 billion despite heavy investment. Management reaffirmed its full-year guidance, aiming to hit the upper end of expectations for the twentieth consecutive year. For a dividend stock dealing with complex infrastructure across three countries, that level of consistency is rare.
The core of Enbridge’s hidden value lies in its diversification. Liquids pipelines, natural gas transmission, gas distribution, and renewable power all contribute to earnings, with no single segment making the company overly dependent on commodity prices. Liquids volumes averaged three million barrels per day last quarter, with the system running near capacity for most of the year. In gas transmission, expansions are directly tied to growing LNG and industrial demand. Meanwhile, the $900 million Clear Fork Solar project shows how Enbridge is tapping into corporate demand for clean energy without straying from its low-risk, contracted model.
More to come
These projects are not small side bets. The current secured backlog stands at over $30 billion, spanning growth in every business line, and management has identified a $50 billion longer-term opportunity set. That’s supported by $9 to $10 billion in annual investment capacity, even after factoring in regular dividend increases. And those dividends remain one of the company’s biggest selling points – a forward yield near 5.8% with a history of annual raises. While the payout ratio above 100% on reported earnings might look stretched, the calculation based on distributable cash flow paints a much more sustainable picture, especially with predictable, regulated cash streams.
Debt is the most common criticism levelled at Enbridge, and at over $100 billion, it’s not insignificant. But leverage has improved to 4.7 times EBITDA, comfortably within the target range. That’s thanks in part to capital recycling moves like selling a minority interest in the Westcoast system to Indigenous partners. The dividend stock’s investment-grade rating and track record of accessing low-cost capital mean it can fund growth without putting the balance sheet in jeopardy.
Foolish takeaway
What investors might be missing is how well-positioned Enbridge is for multiple energy futures. If oil demand stays robust, its Mainline system is irreplaceable infrastructure. If natural gas becomes the key transition fuel for power grids, its transmission and storage assets will be central to meeting that demand. If renewables take a larger share, projects like Clear Fork Solar and other wind and solar developments give Enbridge a foothold in that market, too. It’s an “all-of-the-above” strategy that ensures relevance no matter how the global energy mix evolves. One that can provide around $400 annually from a $7,000 investment at writing!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| ENB | $65.76 | 106 | $3.77 | $399.62 | Quarterly | $6,974.56 |
In a market where big-cap energy stocks can feel like mature, low-growth plays, Enbridge proves it can still grow meaningfully while paying one of the best dividends on the TSX. The dividend stock’s stability, scale, and project pipeline are clear. But the long-term optionality built into its diversified model is where the real hidden value lies. For patient investors, that’s a combination worth holding onto, and possibly adding to, before the market catches on.
