Enbridge (ENB -0.94%) has been a model of consistency. The Canadian pipeline and utility giant has paid dividends for over 70 years and has increased its payment for the past 30 consecutive years. Its earnings are so predictable that the company has achieved its annual financial guidance for 19 straight years and is on track to extend that to 20.
The company has again demonstrated its reliability this year. The pipeline operator has delivered strong earnings and continued enhancing its long-term growth profile. These factors reinforce why the energy stock deserves a place in your portfolio.
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On track for another solid year
Enbridge enjoyed a strong first half, posting record second-quarter results with adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) up 7% despite significant market volatility from tariffs. High utilization across its systems and stable commercial frameworks contributed to its predictable results. The company also benefited from last year's acquisition of three U.S. natural gas utilities.
That strong start has the company on track to deliver results at or above the mid-point of its 2025 financial guidance range. It also expects to get some incremental income in the second half from its recent purchase of a 10% interest in the Matterhorn Express Pipeline.
Enbridge's strong performance despite volatile market conditions during Q2 highlights its low-risk business model. About 98% of its earnings come from predictable revenue frameworks with no commodity price exposure and minimal volume risk. Over 95% of these are with investment-grade customers, and 80% of its revenue arrangements shield earnings from inflation.
More growth secured
The Canadian energy infrastructure giant also continues to secure new growth opportunities. The most notable new addition to its backlog is Clear Fork, a 600-megawatt solar energy facility designed to support the data center operations of Meta Platforms. The company expects to complete the $900 million project by 2027.
Enbridge also approved the $100 million Line 31 expansion of its Texas Eastern Transmission system to meet the growing demand from industrial and power customers in the region. Additionally, the company approved a 300 million Canadian dollar ($217.4 million) project to expand its Aitken Creek gas storage facility, providing enhanced flexibility to LNG customers in Western Canada. These new projects increased the company's secured backlog to CA$32 billion ($23.2 billion) of expansions through the end of the decade.
This backlog supports Enbridge's long-term outlook. The company expects 7% to 9% compound annual adjusted EBITDA growth through 2026 and about 3% annual distributable cash-flow per-share growth. Growth rates are projected to stabilize at around 5% annually after 2026, supporting dividend growth of up to 5% per year.
Backed by a fortress financial profile
Enbridge supports its growth and dividend with a strong financial position. At the end of Q2, the company had a leverage ratio -- a measure of debt compared to earnings -- of 4.7 times, safely within its target range of 4.5 to 5.0 times. This ratio improved from 5.0 times at the end of last year thanks to higher earnings and the sale of a 12.5% share in its West Coast natural gas pipeline system for CA$700 million ($507.3 million). The company also maintains a conservative approach to paying dividends, distributing only 60% to 70% of its steady cash flow.
Enbridge estimates it has about CA$9 billion to CA$10 billion ($6.5 billion to $7.3 billion) in annual investment capacity from its post-dividend free cash flow and balance sheet availability while staying within its targeted leverage ratio. This is enough to fund its current backlog and provide room for more expansion projects and bolt-on acquisitions as opportunities arise. The company is currently pursuing CA$50 billion ($36.2 billion) in longer-term investment opportunities to further strengthen its outlook.
Enbridge checks all the boxes
Enbridge stands out for its low-risk model and resilient financials. These attributes allow it to consistently expand operations and steadily grow its dividend. As CEO Greg Ebel noted in the Q2 earnings report, the company's visible earnings and dividend growth "position Enbridge as a first-choice investment opportunity."
