Enbridge Nears 52-Week High Mark: Should Investors Bet on the Stock?

Enbridge Inc. ENB closed at $48.30 per share in the last trading session, not far from the 52-week high mark of $48.59. Stable cash flows from long-term contracts and handsome dividend payments are probably aiding the stock price rally.

In fact, over the past year, the stock has surged 27%, outpacing the 24.8% gain of the industry’s composite stocks. Over the same time frame, two other midstream players, Kinder Morgan Inc KMI and Enterprise Products Partners LP EPD, have gained 30.4% and 18.1%, respectively.

One-Year Price Chart

Now, the obvious question is: Should investors bet on Enbridge’s momentum? Before coming to the investment conclusions, let’s analyze the midstream energy giant’s business model.

ENB’s Operation Not Vulnerable to Volatility

The midstream giant’s business model has very low exposure to oil and natural gas price volatility, making its cash flow generation highly predictable. On its second-quarter 2025 earnings call, ENB stated that nearly 98% of its EBITDA, representing earnings from core operations, is generated from either long-term contracts with guaranteed minimum payments or midstream networks with regulated cash flows.

Thus, unlike upstream energy companies, Enbridge’s operations are immune to price volatility to a great extent. Thus, cash flow generation from ENB’s midstream activities is highly predictable, just like Kinder Morgan and Enterprise Products.

Enbridge to Gain From AI & Data Center Boom

As power demand from data centers continues to grow, Enbridge is well-positioned to gain. In fact, as stated on the earnings call, the energy major continues to get contracts from technology giants for supplying power and fuel from both renewable projects and natural gas midstream infrastructures. ENB also mentioned during the call that it has more than 10 late-stage development projects that are associated with supplying power and energy to data centers.

Moreover, Enbridge has announced its decision to go ahead with two key natural gas pipeline projects.  One of them is building a giant pipeline network for transporting natural gas from the Permian, the most prolific basin in the United States, to the Gulf Coast, from where the transported gas will be exported as liquefied natural gas (LNG).

Should Investors Bet on ENB Now?

It seems that Enbridge will generate stable cash flows for its shareholders. The midstream giant boasted that it has rewarded shareholders with dividend hikes for 30 consecutive years.

By the end of 2030, the midstream energy giant expects solid growth, backed by its C$32 billion worth of secured capital developments.

Banking on ENB’s lucrative business model, investors are willing to pay a premium price for the stock as reflected in its valuation story. Currently, ENB trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 15.50X, above the broader industry average of 13.87X. Notably, Kinder Morgan and Enterprise Products currently trade at a trailing 12-month EV/EBITDA of 13.77X and 10.28X, respectively.

Considering the backdrop, it makes sense to bet on ENB stock right away. The company currently carries a Zacks Rank #2 (Buy). 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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