Enbridge (TSX:ENB) is one of the most dependable long-term investments, supported by its resilient energy infrastructure business and shareholder-friendly capital allocation strategy. The company has consistently maintained and increased its dividend across multiple economic and commodity price cycles, making it a reliable income stock.
Beyond its attractive dividend profile, Enbridge has also delivered meaningful capital appreciation. The stock has gained more than 82% over the past three years, outperforming the broader equity market. This strong performance is driven by its stable cash flows, regulated and contracted asset base, and strong energy demand.
However, the rally has also pushed Enbridge’s valuation higher. With the stock trading at a premium to its historical averages, should you buy, sell, or hold Enbridge this August?
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Enbridge to keep rewarding shareholders
Despite valuation concerns, Enbridge is still a compelling stock to own for its solid dividend payments. The energy infrastructure company has distributed dividends for over 70 consecutive years and increased its annual payout every year since 1995.
For 2026, the energy infrastructure company forecasts EBITDA between $20.2 billion and $20.8 billion. The company also expects distributable cash flow (DCF) per share to increase by approximately 3%, providing solid support for continued dividend payments and future increases.
Over the longer term, Enbridge projects annual earnings and DCF per share to expand at a mid-single-digit rate. This should help the company continue delivering higher dividends in the years ahead.
Enbridge stock has the potential to outperform the broader market
Enbridge is well-positioned to outperform the broader market, backed by one of North America’s largest and most diversified energy infrastructure networks. Its vast portfolio of pipelines, storage facilities, and transportation assets connects major oil and natural gas production regions with key domestic and export markets. As demand for reliable energy infrastructure continues to increase, higher utilization across these assets should support consistent earnings and DCF growth.
Natural gas is expected to be a major growth driver over the coming years, and Enbridge is investing accordingly. The company is expanding its gas transmission network through projects that support rising electricity demand, LNG export growth, and the rapid buildout of AI data centres, creating long-term earnings opportunities.
Enbridge’s defensive business model further strengthens its investment appeal. Nearly all of its EBITDA is generated from regulated assets or long-term take-or-pay contracts, providing stable and predictable cash flows while minimizing exposure to commodity price fluctuations.
The company’s growth outlook is further supported by a secured capital project backlog of approximately $41 billion, providing visibility into future earnings, DCF, and dividend growth. With resilient cash flows, a strong pipeline of expansion projects, and multiple long-term growth catalysts, Enbridge is well-positioned to deliver attractive total returns through continued dividend increases and long-term share price appreciation.
The bottom line
While valuation concerns may limit near-term upside in Enbridge stock, its resilient business model, reliable dividend growth, and visible long-term expansion pipeline continue to make it a high-quality investment. Existing shareholders should consider holding the stock to benefit from its growing dividend and long-term capital appreciation potential. For new investors, rather than chasing the recent rally, a gradual buying approach through periodic investments could be a prudent way to build a position while managing valuation risk.
