Enbridge Inc. (ENB) Rallies 0.33% on Two-Day Gains as EBITDA Grows 7% and Project Backlog Hits $32 Billion

Enbridge Inc. (ENB) climbed 0.12% on Monday, marking its second consecutive day of gains with a cumulative rise of 0.33% over the past two trading sessions. The stock surged to its highest level since September 2025, with an intraday peak reflecting a 0.87% increase, signaling renewed investor confidence in the energy infrastructure giant.

Enbridge’s 5.68% dividend yield remains a key draw for income-focused investors, yet concerns persist over its sustainability. The company reported a distribution coverage ratio of 0.83x in Q2 2025, below the 1x threshold needed to fully support dividend payments. This lags behind peers such as Energy Transfer and Enterprise Products Partners, which boast stronger cash flow cushions. While Enbridge generated $1.27 billion in free cash flow during the quarter, its 4.7x debt-to-EBITDA ratio raises questions about long-term payout viability amid potential regulatory or economic headwinds.

The company’s financial performance and growth initiatives have bolstered optimism. Q2 adjusted EBITDA rose 7% year-over-year to $4.6 billion, driven by U.S. gas transmission and recent utility acquisitions. A $32 billion project backlog, including $2 billion earmarked for Mainline network upgrades through 2028, positions Enbridge to benefit from decarbonization trends. Investments in renewable natural gas and hydrogen infrastructure align with long-term energy transitions, though these projects require time to scale and deliver returns.

However, Enbridge’s valuation remains a point of contention. Traded at a P/E ratio of 23.36 and a P/FCF ratio of 29.04 as of Q2 2025, the stock commands a premium relative to peers like Enterprise Products Partners (P/E 11.82) and Energy Transfer (P/E 12.75). While this reflects confidence in its growth pipeline, it also heightens expectations for earnings growth. Critics argue that Enbridge’s 7% EBITDA growth in the quarter does not justify its elevated multiples, particularly when compared to peers with stronger cash flow metrics.

Regulatory and macroeconomic risks loom large. The U.S. Inflation Reduction Act’s focus on clean energy could disrupt traditional pipeline operators, though Enbridge’s pivot to hydrogen and renewable gas offers some mitigation. The company has also called for federal support to advance new pipeline projects, indicating regulatory delays as a potential growth constraint. Meanwhile, Enbridge’s CEO noted that tariffs would need to persist for years to significantly alter U.S.-Canada crude flows, suggesting near-term stability in its core operations.

Strategic leadership and capital allocation strategies are under scrutiny. Recent board appointments and investor communications highlight a focus on long-term planning. Enbridge reaffirmed its 2025 financial outlook, emphasizing growth through the decade. However, its 4.7x debt-to-EBITDA ratio, while within industry norms, remains a caution point. Investors are monitoring whether the company can leverage its project backlog and operational efficiency to reduce leverage while maintaining dividend commitments.

Competition from peers offering stronger dividend security further pressures Enbridge’s position. Companies like Energy Transfer and Enterprise Products Partners provide more robust coverage ratios and lower valuations, appealing to risk-averse investors. Enbridge’s premium valuation and weaker coverage metrics position it as a higher-risk, higher-reward option, catering to those prioritizing growth potential and yield over immediate stability.