Enbridge (TSX:ENB) is popularly considered to be one of the safest Canadian dividend stocks, as it has a decades-long track record of rewarding its investors with healthy dividends. This is one of the key reasons why dividend investors continue to stick with it, even in tough economic times. However, its share prices haven’t seen much appreciation in the last decade, despite its improving financial growth trends and fundamental outlook. Notably, ENB stock has risen only about 6% in the last 10 years to currently trade at $45.05 per share compared to a 52% gain in the TSX Composite Index.
Does that make Enbridge stock look highly undervalued? Before we discuss that to find out where its share prices could be 10 years from now, let’s take a closer look at its business growth outlook and financial growth prospects.
The ongoing growth trends in Enbridge’s financials
Contrary to its dismal stock price movement in recent years, the long-term growth trends in Enbridge’s financials look impressive. To give you an idea, in five years between 2017 and 2022, the Calgary-headquartered energy transportation company registered a 20% increase in its total revenue to $53.3 billion. More importantly, its adjusted annual earnings jumped by 43% to $2.81 per share during the same five-year period.
Similarly, Enbridge’s profit margins have also significantly expanded in the last 10 years. For example, it reported an adjusted net profit margin of 10.7% in 2022, which was way higher than its adjusted profit margin of 4.9% in 2012.
Even as macroeconomic challenges have taken a big toll on the financial growth of most energy companies globally, Enbridge is continuing to post positive earnings growth. In the first half of 2023, its adjusted earnings rose 1.3% YoY (year over year) to $1.53 per share, despite a 20.5% YoY decline in its total revenue to $22.5 billion. This positive earnings growth clearly reflected the company’s ability to continue growing even in adverse market conditions.
Where will ENB stock be in 10 years?
While it’s nearly impossible for anyone to precisely predict where exactly ENB’s stock price will be 10 years from now, its strong financial growth trends, improving growth outlook, and focus on revenue optimization and diversification make it look highly undervalued right now.
Besides strength in its well-established traditional energy transportation and pipeline business, Enbridge is striving to expand its presence in renewable energy and oil export segments lately. Nearly two years ago, in September 2021, it acquired one of North America’s top crude oil export facilities, Moda Midstream Operating. Similarly, last month, Enbridge announced a strategic acquisition of three large natural gas utilities located in the United States in a deal worth around US$14 billion.
After increasing its focus on renewable energy nearly two decades ago, Enbridge has so far committed to investing over $8 billion in renewable energy and power transmission projects. As the demand for clean energy grows, you can expect its investments to pay off well in the long run.
Despite all these positive factors, Enbridge stock hasn’t seen much appreciation in the last decade. That’s why it seems to have huge upside potential from current levels, and I wouldn’t be surprised even if its share prices double in the next 10 years.
In addition, its impressive 7.9% annualized dividend yield makes EBN stock even more attractive for income investors on the TSX today.
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The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.
The Company is increasing and extending its financial outlook for EBITDA to 7-9% average annual growth through 2026 and its average annual DCF per share and EPS growth outlooks of 3% and 4-6%, respectively, through 2026. Post 2026, Enbridge expects average annual growth of ~5% for EBITDA, DCF per share and EPS.
There are various ways to approach the stock market to build your financial corpus. One such stock to invest in 2024 to grow your wealth is Enbridge (TSX:ENB), as it is one of the top-performing stocks in the Toronto Stock Exchange.
Enbridge's management team appears to now be targeting dividend growth of around 3% per year for the foreseeable future. However, the company's strong fundamentals do secure the company's 7.6% current yield, providing income investors with a solid investing thesis to own this stock.
Enbridge hit its financial goals in 2023, and management expects the business to deliver solid results in 2024 and over the next few years. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to rise by 7-9% per year through 2026 and about 5% beyond that timeframe.
Enbridge Inc quote is equal to 36.670 USD at 2024-05-07. Based on our forecasts, a long-term increase is expected, the "ENB" stock price prognosis for 2029-05-02 is 39.602 USD. With a 5-year investment, the revenue is expected to be around +7.99%. Your current $100 investment may be up to $107.99 in 2029.
Enbridge (NYSE: ENB) already has one of the safest dividends in the energy patch. The energy-infrastructure giant arguably has the lowest-risk business model in the sector. It also has a very strong financial profile. However, that hasn't stopped the company from further enhancing its dividend safety.
Enbridge is a financially stable and predictable company with a strong track record of growth. The company's diverse energy platform, including natural gas, oil, and renewable energy, positions it well to capitalize on growing global demand.
Largest shareholders include Royal Bank Of Canada, Vanguard Group Inc, Bank Of Montreal /can/, Td Asset Management Inc, 1832 Asset Management L.P., Deutsche Bank Ag\, CIBC World Markets Inc., Wellington Management Group Llp, Bank Of Nova Scotia, and VGTSX - Vanguard Total International Stock Index Fund Investor Shares ...
In addition to its pipeline businesses, though, Enbridge stock also owns a massive utility business, one of the most defensive industries there is. Furthermore, it also has a rapidly growing green energy portfolio as the stock continues to invest in the future of the energy industry.
Enbridge is now ranked among the top 10 large cap stocks on the Toronto Stock Exchange. Stocks in this category are held primarily for capital appreciation. Nano, micro, and small cap stocks can be very volatile and may generate high returns or losses.
At its current dividend payment level, Enbridge can generate an annual income return of roughly 7.7% for investors who buy around the current price. Unlike those of some high-yield dividend stocks, that's a very bankable return. The company generates durable and stable cash flows.
Based on 9 Wall Street analysts offering 12 month price targets for Enbridge in the last 3 months. The average price target is C$51.05 with a high forecast of C$57.00 and a low forecast of C$45.00. The average price target represents a 2.65% change from the last price of C$49.73.
Based on short-term price targets offered by 16 analysts, the average price target for Enbridge comes to $39.04. The forecasts range from a low of $31.39 to a high of $47.58. The average price target represents an increase of 7.67% from the last closing price of $36.26.
What Is Enbridge's Debt? The chart below, which you can click on for greater detail, shows that Enbridge had CA$81.5b in debt in December 2023; about the same as the year before. However, it does have CA$5.97b in cash offsetting this, leading to net debt of about CA$75.5b.
Enbridge is now ranked among the top 10 undervalued large cap dividend-paying stocks on the Toronto Stock Exchange (TSX). Valuation methodology provided by Stockcalc (see below).
Enbridge is now ranked among the top 10 large cap stocks on the Toronto Stock Exchange. Stocks in this category are held primarily for capital appreciation. Nano, micro, and small cap stocks can be very volatile and may generate high returns or losses.
Is Enbridge a good company to work for? Enbridge has an overall rating of 3.9 out of 5, based on over 1,449 reviews left anonymously by employees. 75% of employees would recommend working at Enbridge to a friend and 62% have a positive outlook for the business. This rating has decreased by 3% over the last 12 months.
Introduction: My name is Dr. Pierre Goyette, I am a enchanting, powerful, jolly, rich, graceful, colorful, zany person who loves writing and wants to share my knowledge and understanding with you.
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