Is Enbridge Ready to Capitalize on Mounting Clean Energy Demand?
Enbridge Inc. ENB, a leading midstream energy player in North America, has made significant progress in expanding its asset base through disciplined and low-risk investments. In the March quarter of 2025, ENB secured accretive and low-risk projects worth C$3 billion. Thus, while providing affordable energy, the midstream energy giant has ensured stable cash flows.
Many of ENB's investments are of a brownfield or utility-like nature. Therefore, these investments mainly involve expanding existing infrastructure or benefiting from regulated frameworks. A key focus for ENB in these investments is to capitalize on the increasing demand for natural gas by utilizing its extensive transportation and storage assets. The growth of data centers, rising exports of liquefied natural gas (LNG) and rapid shifts from coal to gas for power generation are driving up demand for clean energy.
Investors should know that apart from aligning with energy demand growth for the long term, Enbridge has also structured these investments to generate stable and predictable cash flows through take-or-pay contracts with investment-grade counterparties. This strategy shows that Enbridge is focused on growing in a safe and steady way without taking big risks. At the same time, ENB is prudent with its finances, ensuring it remains financially strong and stable.
Will EPD and WMB Follow in ENB's Footsteps?
Enterprise Products Partners LP EPD and The Williams Companies Inc WMB are another two leading midstream energy players and are capitalizing on increasing clean energy demand.
Enterprise Products is currently constructing big midstream projects worth $7.6 billion, and the biggest of these, roughly $6 billion worth, are expected to start working in 2025. Notably, a significant portion of this investments is focused on natural gas and associated infrastructure with EPD lining up many of those projects with customers.
Coming to WMB's story, Socrates is its standout project, designed to deliver natural gas power to meet the growing demand from data centers. Williams Companies has already locked in a 10-year contract for it, thereby securing predictable income for years ahead. What makes these projects of WMB special is that they're fully contracted even before completion, which lowers financial risk and ensures stable cash flows.
ENB's Price Performance, Valuation & Estimates
Shares of Enbridge have gained 34.3% over the past year, surpassing the 34.1% rally of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, ENB trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 14.95X. This is above the broader industry average of 13.95X.
The Zacks Consensus Estimate for ENB's 2025 earnings hasn't been revised over the past seven days.
ENB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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