SLB vs. Enbridge: Which Energy Stock Should You Bet On?

In the energy sector, SLB SLB and Enbridge Inc. ENB are two leading companies with contrasting business operations. SLB is an energy technology company and a leading oilfield services provider to upstream companies worldwide. The company provides digital services to achieve higher efficiencies and execution speed across workflows. Enbridge, on the other hand, is a prominent name in North America’s midstream energy sector, operating an extensive crude oil and liquids transportation network and gas transportation pipelines, while maintaining a presence in renewables and utility businesses.

Over the past year, SLB has rallied 26.2%, outperforming ENB’s 25.6% gain. While price gains demonstrate the attractiveness of any stock, it would be wiser to evaluate the fundamentals and overall business environment of both stocks before making an investment decision.

SLB’s Integrated Portfolio Provides Differentiated Value

In its most recent earnings release, SLB mentioned that it has won several long-term contracts for deepwater projects across multiple geographies. The company expects offshore activity, particularly in deepwater, to gain momentum toward the end of 2026 and aims to capitalize on the improving long-term growth outlook.

Through its OneSubsea joint venture, the company offers differentiated value via an integrated portfolio of subsea technologies and digital solutions. SLB continues to demonstrate strong capabilities in the Digital segment, integrating workflows and enabling customers to harness AI-enabled tools to drive efficiency gains, automate processes and achieve higher productivity.

Beyond its involvement in the traditional oil and gas business, SLB is stepping into high-growth markets like Data Center Solutions. The company expects the data center infrastructure business to witness significant growth in 2026. The company has expanded its operations in the United States, doubling its manufacturing capacity to meet the demand for data center infrastructure.

ENB's Stable Business Model With Minimal Commodity Price Exposure

ENB’s midstream business is highly stable, owing to its contractual nature. In fact, 98% of its EBITDA is supported by long-term “take-or-pay” contracts, which shield it from commodity price volatility. This implies that shippers are expected to pay even when they do not use capacity. The company has highlighted that more than 95% of its customer base comprises investment-grade companies.

Enbridge’s acquisition of U.S. gas utilities is contributing positively to its EBITDA. The utility business adds another layer of stability to its operations, resulting in predictable earnings supported by regulated rates and long-term agreements. Thus, the company’s earnings are expected to remain stable, with minimal exposure to fluctuations in commodity prices.  Enbridge is expected to generate secure cash flows in the future, driven by growth capital worth C$39 billion.

The midstream player continues to reward shareholders with dividend hikes. It has increased its quarterly dividend to C$0.97 per share for 2026 (C$3.88 annualized), marking the 31st consecutive year of dividend-per-share growth.

Valuation Snapshot

Considering the valuation snapshot, it has become evident that investors are now willing to pay a premium for Enbridge over SLB, due to its stable midstream business model. This is reflected in the fact that ENB trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 16.63X, above SLB’s 10.43X.

SLB vs. ENB: Should You Stay Invested or Exit?

For SLB, despite the positive developments, the company believes that an oversupplied oil market may continue to weigh on commodity prices in the near term. As a result, upstream companies are anticipated to be cautious with their spending on exploration and production activities, hurting the demand for their oilfield services. Considering its cheaper valuation, current investors may opt to hold SLB stock, which has a Zacks Rank #3 (Hold) at present.

Investors who are risk-averse and prefer stability can continue to hold ENB stock, which has a Zacks Rank #3 at present, due to the contractual nature of its business. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research