There’s a lot of uncertainty in the market these days. Many economists believe that tariffs could cause inflation to rise and economic growth to slow. That makes investing money with much confidence difficult, since those headwinds could impact corporate profits and stock prices.
However, some companies are in a better position to withstand the current challenges than others due to their highly resilient business models. Enbridge (NYSE: ENB) is one of those companies. The pipeline and utility giant generates very predictable and stable cash flows. Meanwhile, it has visible growth ahead through 2029. Because of that, you can confidently buy and hold the 6%-yielding energy stock through at least the end of the decade.
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A model of durability and predictability
Enbridge recently reported strong first-quarter results. The energy infrastructure company grew its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by an impressive 18% to a record 5.8 billion Canadian dollars ($4.2 billion). Meanwhile, its distributable cash flow rose 9% to CA$3.8 billion ($2.7 billion). The company benefited from the underlying strength of its base business, recently completed expansion projects, and the full impact of its gas utility acquisitions.
That strong showing gave Enbridge the confidence to reaffirm its 2025 financial guidance and multiyear financial outlook. As such, the company is on track to achieve its annual financial guidance for the 20th year in a row. That’s impressive, considering all the volatility in the market during that period, which has included two major recessions, a couple of significant oil price slumps, wildfires in Canada, a global pandemic, and rising inflation.
A big factor fueling the company’s predictability is its low-risk business profile. Enbridge gets 98% of its earnings from stable cost-of-service frameworks or long-term, fixed-rate contracts. Those structures have mechanisms in place that protect 80% of its EBITDA from inflation. These features give the company a lot of visibility into its annual earnings.
Topping off the fuel tank
Enbridge has also continued to enhance its long-term growth profile this year. It has approved up to CA$2 billion ($1.4 billion) in capital investment in its Mainline pipeline through 2028 to improve the reliability of that pipeline to support growing oil production in Canada. Meanwhile, the company and its partners approved the construction of the Traverse Pipeline, which will increase gas transportation capacity in the U.S. Gulf Coast when it enters commercial service in 2027. It also approved the expansion of the T-North Pipeline in Canada and the T15 project at its gas utility in North Carolina.
With these additions, Enbridge now has CA$28 billion ($20.1 billion) of commercially secured capital projects on track to enter service through 2029. That gives the company lots of visibility into its future growth. It continues to expect to grow its adjusted EBITDA at a 7% to 9% annual rate through 2026 while delivering around 3% compound annual distributable cash flow per share growth. It anticipates that those growth rates will level out to around 5% annually after 2026.
Enbridge also continues to find new opportunities to deploy its excess investment capacity. The company recently agreed to invest $300 million to buy a 10% interest in the Matterhorn Express Pipeline, which transports gas out of the Permian Basin. It has ample financial flexibility to continue making bolt-on acquisitions as opportunities arise. It also has the capacity to sanction additional capital projects. These future investments will further fortify its long-term growth outlook.
The company’s strong financial profile and visible growth outlook drive its confidence that it can continue increasing its high-yielding dividend. Enbridge believes it can grow its payout by around a 3% annual rate through next year and by as much as 5% per year after 2026. That would further extend the company’s dividend growth track record, which reached 30 straight years in 2025.
Predictable income and growth
Enbridge has built one of the most resilient businesses in the energy sector. Its diverse portfolio of energy infrastructure assets generates stable and steadily rising cash flow. That gives Enbridge the money to pay a lucrative dividend while investing in expanding its business. The company has growth lined up through the end of the decade, which should support continued dividend increases and shareholder returns. Enbridge’s combination of resiliency and visible growth makes it a stock you can confidently buy and hold through at least 2029.
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Matt DiLallo has positions in Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool has a disclosure policy.
