Long-term investing is one of the most effective strategies for building wealth. By acquiring the stocks of fundamentally strong companies and holding them through market cycles, investors can reduce the impact of short-term volatility while benefiting from compounding over time. This approach also requires less frequent portfolio monitoring and helps keep transaction costs low by minimizing trading activity.
Dividend stocks are particularly well suited to this strategy, offering the potential for both capital appreciation and a steady stream of income. Reinvesting those dividends can further accelerate long-term returns through compounding. Also, these companies are less susceptible to market volatility due to their healthy, reliable cash flows and consistent payouts. With that in mind, let’s examine Enbridge (TSX: ENB) to determine whether it is an attractive buy for long-term investors.
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Enbridge’s business outlook
Enbridge is a diversified energy company that operates over 200 revenue-generating assets, including oil and natural gas pipelines, renewable energy assets, and natural gas utilities. It earns around 98% of its income from long-term take-or-pay contracts and regulated utility assets, while an inflation-linked mechanism protects 80% of that income. This highly predictable business model limits the company’s exposure to commodity price swings, economic slowdowns, and broader market volatility, enabling it to generate stable, dependable cash flows across market cycles. It has met or exceeded its guidance for the last 19 years.
Supported by these solid financial performances, the company has delivered a total shareholders’ return of around 1,030% over the last 20 years, at an annualized rate of 12.9%. Also, it has rewarded its shareholders by paying dividends consistently for over 70 years and increasing them uninterruptedly for 31 years. Currently, the company offers a healthy forward dividend yield of 5.1%.
Now, let’s look at Enbridge’s growth prospects.
Enbridge’s growth prospects
Growing oil and natural gas production across North America continues to increase demand for Enbridge’s extensive energy infrastructure and services, creating meaningful long-term growth opportunities for the company. To capitalize on this trend, Enbridge has identified approximately $50 billion in growth opportunities and plans to invest roughly $10–$11 billion annually to advance these projects.
In addition to expanding its asset base, Enbridge is pursuing asset optimization and cost-efficiency initiatives that could generate $600 million to $900 million in savings by the end of 2027. Supported by these efforts, management projects that adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) and distributable cash flow per share will increase at a compound annual growth rate of about 5% through 2030.
Enbridge has also strengthened its financial position. At the end of the first quarter, the company had $12.7 billion in available liquidity, up from $10.8 billion at the end of 2025, while its net debt-to-EBITDA ratio remained within the company’s target range of 4.5 to 5 times, ending the quarter at 5 times. Backed by resilient cash flows, a visible growth pipeline, and a solid balance sheet, Enbridge expects to return approximately $45 billion to shareholders over the next five years, reinforcing the sustainability of its dividend and its appeal as a long-term income investment.
Investors’ takeaway
Enbridge has delivered strong returns over the past 12 months, with its stock climbing about 33% on the back of solid financial performance and improving investor sentiment. Despite this rally, its valuation remains attractive, trading at 2.9 times forward sales and 26.3 times forward earnings, which appears reasonable for a company with stable cash flows and a proven track record of dividend growth.
Backed by its resilient business model, dependable cash flows, consistent dividend increases, attractive yield, and solid long-term growth prospects, I believe Enbridge remains an excellent buy for long-term investors.
