Enbridge (TSX: ENB) is moving higher again after it gave back some gains over the past few months. Investors are wondering if ENB stock is still attractive and good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividends and total returns.
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Enbridge share price
Enbridge trades near $66 per share at the time of writing. The stock is up more than $3 per share in the past three weeks, but remains below the $70 it reached at the end of September before pulling back through the end of the year.
Risks
Enbridge fell from $58 in 2022 to below $44 in the fall of 2023. The slide corresponded with rising interest rates in Canada and the United States. Enbridge uses debt to fund part of its growth program, including acquisitions and capital projects. The steep increase in borrowing costs over such a short period of time caused some concern among investors that Enbridge might be forced to trim its generous dividend to preserve cash flow. That didn’t happen, and the stock rebounded in 2024 and 2025 as the central banks once again reduced interest rates.
The U.S. Federal Reserve and the Bank of Canada both kept rates at current levels at their most recent rate announcements. Analysts widely expect the U.S. to lower rates at some point this year. That would be positive for Enbridge. Canada is expected maintain its target rate through the year.
There is a risk that inflation could surge if the U.S. imposes new tariffs or if businesses start passing through the higher costs of restocking their supplies. In the event the central banks are forced to raise interest rates, Enbridge’s share price would face some headwinds.
On the operational side, the dip in the stock that occurred in early January was due to concerns that rising oil supply from Venezuela to U.S. refineries on the Gulf Coast could reduce demand for Canadian oil that currently passes along Enbridge’s oil pipeline network. The near-term impact is not expected to be significant, which is why the stock has since recovered, but investors will need to keep an eye on whether or not the planned investments in Venezuela’s oil sector materialize.
Opportunity
Enbridge diversified its asset base in recent years to help balance out revenue sources.
The company purchased an oil export terminal in Texas and took a stake in the Woodfibre liquefied natural gas (LNG) export facility being built on the coast of British Columbia. In 2024, Enbridge spent US$14 billion to buy three American natural gas utilities. These deals added stable rate-regulated revenue streams and turned Enbridge into the largest natural gas utility operator in North America. Enbridge also bought a wind and solar developer to boost its renewable energy division.
The current $35 billion secured capital program is spread out across the various divisions. As the new assets are completed and go into service, the company expects to see steady growth in distributable cash flow. This should support ongoing dividend increases. Enbridge raised the dividend in each of the past 31 years.
Investors who buy ENB stock at the current level can get a dividend yield of 5.9%.
The bottom line
Near-term turbulence is expected, but Enbridge has a solid capital program in place and pays an attractive dividend. If you have some cash to put to work in a dividend portfolio, this stock deserves to be on your radar.
