- Enbridge’s forward yield near 5.7 percent remains supported by regulated cash flows but faces tighter coverage.
- Dividend growth has slowed while payout ratios are projected to reach about 114 percent.
- Large capital projects provide medium term support, though oil segment softness adds risk.
High yield supported by stable cash flows
Enbridge continues to attract income investors with a forward dividend yield near 5.7 percent. This is underpinned by its fee based pipeline and gas utility operations, with roughly 98 percent of EBITDA regulated or contracted and about 80 percent inflation indexed, as noted in regulated/contracted EBITDA.
This structure offers uncommon visibility for a high yield stock, reinforcing Enbridge’s appeal within dividend and DRIP strategies. The company has raised its dividend for more than 30 years, supported by diversified operations across liquids pipelines, gas transmission, distribution, and renewables.
Dividend increase as coverage tightens
The latest dividend increase to CA$0.97 signals continued commitment to shareholders, yet analysts project the payout ratio could reach about 114 percent, highlighted in the summary.
This tightening coverage is the central concern for 2026. Supporting data further illustrates the pressure:
- Quarterly dividend: US$0.683
- Annualized payout: US$2.732 per share
- Forward yield: 5.699 percent at about US$47.94
- One year dividend growth: negative
Enbridge’s 10 year dividend CAGR sits near 3 percent, but more recent periods show slowing or negative real growth. This reflects the strain of rising payouts while earnings growth moderates.
These concerns echo commentary pointing to weak coverage ratios, which reduce financial flexibility if growth softens or borrowing costs rise.
Growth outlook with mixed signals
Medium term growth is supported by approximately $37 billion in secured capital projects that are expected to expand earnings capacity. Enbridge’s model still operates like a toll road, benefiting from throughput rather than commodity pricing.
Natural gas demand tied to electricity load from data centers may provide upside, as noted in expectations that natural gas demand is expected to surge.
Lower interest rates also strengthen the case for high yield stocks, improving financing conditions and widening the yield advantage relative to fixed income.
However, growth in the crude oil segment is expected to soften. This aligns with cautions around slower future growth. Enbridge will rely more heavily on regulated gas utilities and pipeline expansions to sustain long term dividend increases.
What this means for dividend investors
Enbridge remains attractive for income focused portfolios due to its near 6 percent yield, regulated cash flows, and long record of dividend growth. Its long dated infrastructure and multi billion dollar project pipeline provide continued visibility.
Yet risks require close monitoring. Dividend coverage is stretched, growth in key segments is slowing, and free cash flow trails the rising payout. These dynamics matter for investors who depend on stable ENB dividends for long term compounding and DRIP strategies.
Enbridge retains its position as a core income holding with stable assets and significant relevance in North American energy. However, 2026 introduces narrower margins for dividend safety. Scaling into positions gradually while watching payout ratios and project execution may be the prudent approach for new investors.
