Enbridge (TSX: ENB) simply had a powerful quarter. And certainly one of Wall Avenue’s greatest banks thinks there’s extra upside forward.
On Feb. 19, Citi raised its value goal on Enbridge to $77 from $75, whereas reiterating a “Purchase” ranking on the inventory.
The transfer got here after analysts reviewed Enbridge’s fourth-quarter outcomes, which beat expectations and included the announcement of a number of new tasks tied to rising energy demand throughout North America.
For income-focused traders, Enbridge has lengthy been a go-to title. However the development story behind the dividend is getting stronger and forcing analysts to pay nearer consideration.
Supply: Getty Pictures
How did Enridge inventory carry out in This fall 2025
Earlier this month, Enbridge reported report fourth-quarter and full-year earnings, marking its twentieth consecutive yr of reaching or exceeding its annual monetary steerage.
- Full-year adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) got here in above the midpoint of steerage.
- Distributable money movement (DCF) per share additionally beat expectations.
The mainline pipeline, Enbridge’s core liquids asset, transported roughly 3.1 million barrels per day on common all year long. It was apportioned, that means demand exceeded capability, for all however three of the previous 12 months.
CEO Greg Ebel highlighted the size of the corporate’s development exercise. In 2025, Enbridge sanctioned greater than $14 billion in new capital tasks throughout all 4 of its enterprise models: liquids pipelines, fuel transmission, fuel distribution and storage, and renewable energy.
The corporate’s secured development backlog now stands at $39 billion, extending by 2033, a 35% enhance since its Investor Day in March 2025.
For 2026, Enbridge reaffirmed steerage for EBITDA between $20.2 billion and $20.8 billion, and DCF per share of $5.70 to $6.10. Given an annual dividend of $3.88 per share, the payout ratio for the TSX power inventory is round 66%.
The TSX dividend inventory will profit from AI tailwinds
One of many greatest themes driving Enbridge’s development isn’t oil. It’s information.
Synthetic intelligence (AI) and information centres are consuming electrical energy at a speedy tempo. That surge in energy demand is translating straight into increased demand for pure fuel, the gasoline that powers a lot of the grid, particularly throughout peak durations.
Enbridge’s Fuel Transmission workforce is advancing greater than 50 potential information centre-related alternatives that would considerably enhance demand for pure fuel within the upcoming decade.
In January, the corporate’s Texas Jap pipeline hit a brand new report, transporting over 15 Bcf per day.
Enbridge continues to develop its dividend
For dividend traders, the basics listed here are arduous to disregard.
The TSX dividend inventory has now raised its payout for 31 consecutive years. The corporate expects to pay out $40 billion to $45 billion in distributions over the following 5 years, all supported by regulated and contracted money flows.
The payout ratio sits in the course of the corporate’s 60% to 70% DCF goal vary, that means the dividend is well-covered and supported by actual money era.
Annual funding capability now stands between $10 billion and $11 billion, and the typical return on capital employed for 2025 natural tasks is roughly 11%. Notably, renewable tasks are producing mid-teen returns.
Enbridge additionally operates North America’s largest pure fuel utility by quantity and strikes about 30% of all crude oil produced on the continent, based on firm information.
With Citi’s up to date $77 value goal and a Purchase ranking in place, the query for traders is simple: Does an organization with 31 years of dividend development, a $39 billion backlog, and a direct line into the AI infrastructure buildout deserve a spot in your portfolio?
The reply, at the very least for Citi, seems to be sure.