Enbridge Inc. ENB is nearing its 52-week peak of $45.78 after closing at $43.50 in the last trading session. As a dominant force in the midstream energy space, Enbridge continues to capture investor interest with its diverse energy portfolio and aggressive expansion into renewables and LNG infrastructure. With strong fundamentals and a proven track record of growth, many investors are now speculating whether ENB could surge past its 52-week high and set new records.

However, before offering any investment advice, let's first take a closer look at the company’s fundamentals.

ENB Secures Incremental Cash Flows From Key Capital Projects

Enbridge is a leading midstream energy player in North America, operating an extensive crude oil and liquids transportation network spanning 18,085 miles — the world's longest and most complex system. ENB’s gas transportation pipeline network spans 71,308 miles, covering 31 U.S. states, four Canadian provinces and offshore areas in the Gulf of Mexico.

Enbridge’s pipelines transport 20% of the total natural gas consumed in the United States. The company generates stable, fee-based revenues from these midstream assets, as they are booked by shippers on a long-term basis, minimizing commodity price volatility and volume risks.

The midstream energy major will generate incremental cash flows from its C$29 billion backlog of secured capital projects, which include liquids pipelines, gas transmission, gas distribution and storage, and renewables. The maximum in-service date is 2029.

ENB’s Dividend Growth Story: A Strong Commitment to Investors

Enbridge prioritizes returning capital to shareholders, as evidenced by 30 consecutive years of dividend growth, earning its status as a dividend aristocrat. Currently, ENB offers a dividend yield of 6.2%, which is higher than the 5.2% of the composite stocks in the industry.

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Considering its substantial backlog of midstream growth projects, Enbridge is expected to continue rewarding shareholders with attractive dividend payments. The midstream giant maintains a 60-70% dividend payout ratio, ensuring consistent and growing returns for shareholders while balancing reinvestment in future growth. The company plans to return more than $40 billion to shareholders over the next five years, reinforcing its position as a top dividend-paying energy firm. By focusing on self-funded growth and capital recycling, Enbridge aims to expand its infrastructure while keeping debt levels in check, strengthening its long-term financial stability.

Time to Bet on ENB?

Notably, Enbridge has met or exceeded its financial guidance for 19 straight years, proving its earnings stability and predictable cash flow. This consistency highlights the company's ability to navigate market fluctuations, regulatory challenges and economic downturns while maintaining profitability.

The positive developments are reflected in its price performance, with the company approaching its 52-week high level and posting an 11.1% gain over the past six months. However, it has lagged behind the industry’s composite stocks, which have surged 19.3% during the same period.

Six-month Price Chart

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Enbridge is also currently considered relatively overvalued, trading at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 15.24x. This figure surpasses the broader industry average of 14.16x. It is higher than other major midstream companies such as Kinder Morgan Inc. KMI and Enterprise Products Partners LP EPD, which trade at 14.07x and 10.67x EV/EBITDA, respectively.

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Therefore, although the company’s long-term outlook is strong, investors should wait for a more opportune moment as ENB, carrying a Zacks Rank #3 (Hold), is currently overvalued. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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