Can Enbridge Sustain Its Growth Story as It Balances Scale, Stability, and Transition?

Enbridge (ENB) is one of North America’s largest energy infrastructure platforms, spanning liquids pipelines (mainline and Gulf Coast systems), gas transmission (U.S./Canada pipelines and storage), gas distribution (Ontario plus newly acquired U.S. utilities), and a growing renewables arm. Its model is built on long-term contracts, regulated returns, and high system utilization that produce stable, utility-like cash flows and a long track record of dividend growth.

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Year to date, shares are modestly higher (see YTD chart), mirroring solid fundamentals. In Q2/25 Enbridge posted $4.6B in adjusted EBITDA (+7% y/y), $0.65 adjusted EPS, and $2.9B in DCF while reaffirming full-year guidance of $19.4–$20.0B adjusted EBITDA and $5.50–$5.90 DCF/share. Leverage improved to 4.7x Debt/EBITDA, within the target range.

Strategically, management is leaning into enduring gas demand and hyperscale power needs: a 600 MW Clear Fork Solar project for Meta, a 40 Bcf Aitken Creek storage expansion tied to West Coast LNG, Line 31 capacity on Texas Eastern, and Gulf Coast optimization (Traverse upsized to 2.5 Bcf/d). With ~$32B in secured backlog and $9–$10B annual investable capacity, the multiyear growth runway remains visible alongside a quarterly dividend of $0.9425 per share.

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Financial Story

Enbridge’s second quarter highlighted the benefits of diversification and disciplined capital management. While Gulf Coast liquids volumes softened, strong earnings growth in gas transmission and distribution offset those headwinds. The integration of three U.S. gas utilities, Ohio, Utah, and North Carolina, provided a full-quarter uplift, while Enbridge Gas Ontario saw stronger storage pricing and colder weather, boosting margin. Adjusted EBITDA grew $309 million year-over-year, with nearly 80% of total earnings now derived from regulated or contracted sources.

On the balance sheet, the company’s funding mix remained conservative. Debt-to-EBITDA improved to 4.7x, aided by asset monetizations such as the $700 million Westcoast pipeline stake sale to the Stonelasec8 Indigenous Alliance. Though higher interest and depreciation costs from recent acquisitions weighed on distributable cash flow, underlying operations remained robust. Management reaffirmed that all secured growth projects are fully financed through internal capacity, preserving credit flexibility while sustaining dividend growth.

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Broader Market Context

North American energy markets are in transition, and Enbridge sits squarely at the intersection. Demand for oil and natural gas remains resilient, with record export volumes expected through 2026, but the fastest growth lies in natural gas transmission and low-carbon solutions. Data-center development, LNG exports, and industrial electrification are expanding baseload power demand, creating new infrastructure needs across Enbridge’s core markets.

The company’s “all-of-the-above” strategy gives it unique adaptability in this environment. While peers focus narrowly on decarbonization or fossil optimization, Enbridge’s dual-track growth approach, expanding gas networks while building renewables, enables it to serve both legacy and emerging demand. This balance has made it one of Canada’s most dependable income investments, even as investors await acceleration in DCF per share growth to justify multiple expansion.

1. Gas Transmission and Storage Drive Near-Term Growth

The U.S. Gas Transmission segment remains the company’s growth engine. EBITDA rose 28% year-over-year to $1.38 billion, driven by higher utilization and favorable rate outcomes. Expansions such as Line 31 and the Traverse Pipeline are positioning Enbridge to capture incremental industrial and LNG demand across the Gulf Coast. The Aitken Creek expansion, now sanctioned, will add 40 Bcf of capacity to Western Canada’s only underground storage facility, an asset critical to enabling B.C.’s LNG export strategy.

The success of these projects reflects Enbridge’s shift from growth-by-acquisition to growth-by-optimization. Low-capital compression projects and storage upgrades now deliver mid-teens returns on invested capital. Combined with rising demand from data centers and manufacturing hubs, gas transmission and storage should continue to offset volatility in liquids and renewables segments through 2026.

2. Renewable Power: Scale Through Partnerships, Not Size

Renewables remain a small but strategic part of Enbridge’s portfolio. The recently sanctioned Clear Fork Solar project in Texas, a 600 MW, $0.9 billion development underpinned by a long-term offtake with Meta, demonstrates how Enbridge is leveraging its balance sheet and expertise to secure long-duration contracted revenue. Investment-grade counterparties fully support the project and align with Enbridge’s low-risk return framework.

Beyond Clear Fork, the company is exploring co-development opportunities for future wind and solar projects through minority equity stakes, avoiding overexposure to volatile merchant power markets. While renewable EBITDA declined year over year due to weaker European offshore wind generation, management reiterated its commitment to scaling renewables alongside regulated gas growth, ensuring the segment enhances returns rather than diluting them.

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3. Liquids and the Long Game for Mainline Optimization

Liquids Pipelines, still Enbridge’s largest segment, generated $2.33 billion in adjusted EBITDA, down 5% from last year as Gulf Coast and Bakken volumes eased. Mainline throughput averaged 3.0 million barrels per day and remained fully apportioned through most of the first half, underlining continued demand despite softer regional differentials. The company’s upcoming Mainline Optimization Phase 1 aims to enhance throughput and increase system efficiency by leveraging existing right-of-way, potentially adding 200–300 kbpd of capacity without greenfield expansion.

Looking ahead, the proposed Southern Illinois Connector could further extend Enbridge’s reach to high-value export markets. These incremental expansions are designed to boost profitability and sustain long-term utilization. Even with modest near-term volume pressure, the Liquids network remains a foundational cash generator, accounting for nearly half of total EBITDA and providing critical funding stability for the company’s transition projects.

The TIKR Takeaway

Enbridge’s story in 2025 is one of disciplined execution and balanced ambition. The company continues to deliver steady earnings growth while de-risking its capital program, building partnerships with Indigenous communities, and expanding its footprint into cleaner power. Its integrated model, spanning oil, gas, and renewables, provides investors with exposure to energy demand across all scenarios.

The near-term challenge remains per-share growth. Rising financing costs, higher depreciation, and elevated capex are capping distributable cash flow, even as EBITDA climbs. But with leverage trending down, a strong project pipeline, and growing utility earnings, Enbridge appears well-positioned to reaccelerate DCF per share heading into 2026. For long-term investors, the combination of yield, stability, and optionality remains difficult to match.

Should You Buy, Sell, or Hold Enbridge Stock in 2025?

Enbridge remains one of the most reliable income and infrastructure plays in North America. Its 7% EBITDA growth and disciplined capital plan justify its premium yield, while the stock’s valuation already reflects much of the near-term stability story. A stronger case would hinge on clear acceleration in DCF per share growth and execution milestones across its gas expansion projects. Until then, Enbridge offers dependable yield with moderate upside, a steady performer rather than a breakout story.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!