Recently, Enbridge (TSX:ENB) has been making the headlines with its 2026 outlook and 3% dividend growth. The company met its long-term growth expectations as promised, demonstrating its resilience to macroeconomic events. A quick look at its 2026 outlook shows slightly stretched debt but also cash flow growth.
How does 2026 look for Enbridge?
Enbridge forecasts adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to grow at a compounded annual growth rate (CAGR) of 8% while DCF will grow at a 3% CAGR between 2023 and 2026. During this period, Enbridge increased its debt to acquire three gas utilities in the United States and accelerate construction of gas pipelines. This increased its net debt-to-EBITDA ratio to 4.8 times. Although it is within the guided range, the finance cost has slowed down its distributable cash flow (DCF), and this trend could continue in 2026.
Enbridge expects to grow its DCF by 4% to $5.90 per share, which is the midpoint of the guided range of $5.70 and $6.10. The slower cash flow growth reflects interest expense on higher principal debt balances. In the meantime, approximately $8 billion worth of new projects will enter service in 2026. This is higher than the estimated $5 billion worth of projects entering service in 2025.
How does 2027 to 2030 look for Enbridge?
The benefits of all these projects coming online in 2026 will be felt in 2027 with a full year of cash flow. Enbridge expects adjusted EBITDA, DCF, and dividend per share CAGR to normalize at 5% from 2027 onwards.
This target looks achievable as Enbridge’s cash flow is not significantly affected by oil and gas prices. Moreover, the new infrastructure will help Canada export liquified natural gas to Europe and other countries.
Although Enbridge has a low-risk business model, it is exposed to the risk of a slowdown in trade volumes. If the trade war with the United States prolongs and America reduces its oil import volumes, Enbridge could be severely hit. The new gas pipelines, renewable energy, and gas utility account for more than 60% of its adjusted EBITDA. However, oil still forms a major source of revenue. Hence, developments around tariffs could keep Enbridge stock volatile.
Should you invest in Enbridge for the next five years?
The first five years from 2020 to 2025 saw Enbridge’s portfolio transition from oil pipelines to gas pipelines. The transition diverted capital allocation to fund these projects, which increased the balance sheet leverage. Thus, the company slowed the dividend growth rate from 9.8% in 2020 to 3% in 2021 to date.
The next five years could see Enbridge reap the rewards of its expenditure. The dividend growth will accelerate to 5% in 2027 and probably stay at that rate till 2030. As for the share price, the acquisition of the gas utility increased its enterprise value, which led to a share price increase from $40–$60 by 2024 and then to $60–$70 by 2025. The stock is expected to remain within its new range, reflecting the expanded size of the business.
You could consider investing in Enbridge stock whenever the share price trades near $60 and lock in a 6% dividend yield. It has the roadmap in place to continue growing its dividends for the next five years.
