Investors with a three-year or longer time horizon could consider TSX stocks with fundamentally strong businesses that can deliver steady growth and regular income. This strategy can help generate above-average total returns by combining share price gains with regular dividend payments, allowing your wealth to grow and compound over time.
One such high-quality stock is Enbridge (TSX: ENB). The energy infrastructure giant has been a standout performer. Over the past three years, Enbridge stock has grown at a compound annual growth rate (CAGR) of roughly 23.7%, delivering capital gains of more than 89%. On top of those impressive returns, the company has continued to reward shareholders with growing dividends, returning billions of dollars in distributions.
While past performance doesn’t guarantee future results, the solid momentum in its business and growth opportunities suggests it could continue to create wealth through a combination of share price gains and rising dividends.
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Here’s why Enbridge stock is a solid long-term bet
Enbridge enters the next three years with several advantages, including highly predictable cash flows, a massive portfolio of energy infrastructure assets, and exposure to growing energy demand. These strengths position the company to continue expanding its earnings while supporting future dividend increases and share price growth.
Supporting Enbridge’s growth and dividend payments are its high-quality, regulated, and contracted assets. Most of Enbridge’s earnings before interest, taxes, depreciation, and amortization (EBITDA) are generated under regulated frameworks or long-term take-or-pay agreements, creating stable revenue streams that are largely insulated from short-term commodity price swings. In addition, about 80% of its EBITDA is tied to inflation-adjusted arrangements, helping protect profitability during periods of rising costs.
Enbridge operates one of North America’s largest and most diversified energy infrastructure systems, including crude oil and natural gas pipelines, storage facilities, gas utilities, and renewable energy assets. This broad asset base connects major energy-producing regions with key demand centers, supporting strong utilization and durable competitive advantages.
The company is also well-positioned to benefit from rising energy consumption. Management expects earnings and cash flow to continue to grow at a steady pace. Supporting this outlook is a secured $39 billion capital project backlog backed by long-term contracts, providing clear visibility into future growth and dividend potential.
Emerging trends could further strengthen Enbridge’s prospects. Increasing electricity demand from AI-driven data centres and ongoing investments in the energy transition are expected to drive demand for reliable energy infrastructure. With assets spanning both traditional and renewable energy markets, Enbridge is well placed to capitalize on these opportunities.
For income and growth investors alike, Enbridge’s resilient dividend history and steady growth outlook make it an attractive long-term holding.
Here’s where Enbridge stock will be in three years
Enbridge has been paying dividends for over seven decades. Further, it has increased its annual dividend every year since 1995. Given the strength and stability of its business, this impressive dividend-growth streak is expected to continue.
ENB stock has also delivered strong capital appreciation, growing at a 23.7% CAGR over the past three years. With its resilient business model and attractive growth opportunities, Enbridge appears well-positioned to sustain solid long-term growth. Even if Enbridge stock grows at a more conservative 20% CAGR, which is below its recent performance, it could still climb to approximately $131.47 over the next three years from its June 1st closing price of $76.08.
