Enbridge (ENB +1.77%) has been a stellar dividend-paying stock over the decades. The Canadian pipeline and utility company has paid dividends for over 70 years, while increasing its payout for the last 30 years in a row. The company currently yields 5.7%, well ahead of the S&P 500's paltry 1.2% yield.
The North American energy infrastructure giant will undoubtedly continue to extend its dividend growth streak in the coming years. Fueling that view is its ability to continue securing new expansion projects.
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Adding to the list
Enbridge recently reported its third-quarter financial results. The highlight of the quarter was the progress the pipeline and utility giant made in securing new growth opportunities. Enbridge approved the following expansion projects during the quarter:
- Southern Illinois Connector: The company will invest $500 million to provide 100,000 barrels per day of additional pipeline capacity to transport oil from Western Canada to Texas (2028 expected completion).
- Canyon System Pipeline: Enbridge will invest an incremental $300 million to expand its Canyon offshore system to support BP's Kaskida development (2029).
- Gas storage: It will invest $500 million to expand the Egan and Moss Bluff natural gas storage facilities in stages (2028 through 2033).
- Algonquin Gas Transmission: This $300 million enhancement project will deliver incremental gas to markets in the Northeastern U.S. (2029).
- Eiger Express Pipeline: Enbridge and its joint venture partners approved a new gas pipeline (2028).
- Pelican Carbon Dioxide Hub: Enbridge is investing $300 million to develop a carbon capture and storage hub in Louisiana with Occidental Petroleum (2029).
These new projects added to Enbridge's already robust expansion backlog. The company has added 7 billion Canadian dollars ($5 billion) in new expansion projects this year, boosting its total to CA$35 billion ($24.9 billion). It now has projects underway scheduled to come online through 2033. These projects add further visibility into its ability to deliver 5% compound annual cash flow per share growth after next year. That growing cash flow should support continued dividend increases.
NYSE: ENB
Key Data Points
Further enhancements ahead
Enbridge has a lot more projects in development, several of which it could approve in the coming months. The company is currently progressing toward making a final investment decision on the Mainline Optimization Phase 1 project. The project would add 150,000 barrels per day of oil capacity to its Mainline system, which it could complete by 2027. Additionally, the company is advancing Phase 2, which would add another 250,000 barrels per day of capacity utilizing the Dakota Access Pipeline. The company hopes to approve this project by the middle of next year, putting it on track to enter service by the end of the decade.
Meanwhile, the company is pursuing over $4 billion in potential opportunities to expand its gas utility franchise to support the demand of data centers. It's working on 60 different projects across its service areas to supply gas to power generation facilities and data centers to meet their growing energy needs over the next several years. Additionally, the company is pursuing several more opportunities to expand its gas transmission systems to support growing demand for power (by data centers and power generation facilities) and from LNG export terminals along the U.S. Gulf Coast.
Finally, Enbridge is also pursuing additional opportunities to expand its renewable power business. The company is currently investing about $2 billion into building 1.4 gigawatts (GW) of new solar energy facilities that should enter service through 2027. It also has more than 1.5 GW of additional projects in development to potentially support the future power needs of technology and data center customers.
Securing these and other projects would further enhance and extend Enbridge's growth visibility. This development pipeline helps drive the company's confidence in delivering 5% annual cash flow per share growth after next year, which could support a similar annual dividend growth rate.
A foundational dividend stock
Enbridge has a magnificent record of growing its dividend, which seems unlikely to end anytime soon. The energy infrastructure giant continues to secure new growth capital projects and is pursuing a long list of additional expansions. They will give it the fuel to continue growing its cash flow and dividend over the next several years, making Enbridge an ideal high-yielding dividend stock to hold for passive income.
