Enbridge Shares Up 22.9% in a Year: Should You Buy the Stock or Wait?

Core Insights - Enbridge Inc. (ENB) shares are approaching their 52-week high of $54.20, closing at $51.59 on February 19, with a 22.9% gain over the past year, outperforming peers like Kinder Morgan Inc. (KMI) and Enterprise Products Partners LP (EPD) [1][3][7] Company Overview - Enbridge is a key player in North America's midstream energy sector, operating a vast network for crude oil and liquids transportation, as well as gas pipelines, while also engaging in renewables and utility businesses [3][4] Financial Performance - The company reported fourth-quarter earnings with adjusted earnings per share of 63 cents, surpassing the Zacks Consensus Estimate of 60 cents [3] - Adjusted EBITDA increased by 7% year over year to C$20 billion in 2025, with a reaffirmed near-term growth forecast of 7-9% for adjusted EBITDA from 2023 to 2026 [14] Business Model Stability - Enbridge's midstream operations are highly stable, with 98% of its EBITDA supported by long-term "take-or-pay" contracts, which protect against commodity price volatility [5][12] - More than 95% of its customer base consists of investment-grade companies, further enhancing stability [5] Dividend Growth - The company has a 31-year streak of increasing dividends, with the quarterly dividend raised to C$0.97 per share in 2026, translating to an annualized C$3.88 [7][8] Project Backlog - Enbridge's project backlog has reached C$39 billion, extending through 2033, which is expected to enhance earnings and distributable cash flows, supporting ongoing dividend growth [8][12] Valuation Metrics - ENB's current valuation shows a trailing 12-month EV/EBITDA of 16.48X, which is above the industry average of 14.84X, indicating potential overvaluation [13][14]