Enbridge (ENB): A High-Yield Dividend Powerhouse for Long-Term Passive Income

In an era of economic uncertainty and volatile markets, investors are increasingly seeking income-generating assets that balance stability with growth. Among the most compelling candidates is Enbridge Inc. (ENB), a Canadian energy infrastructure giant whose resilient business model, regulated cash flows, and strategic pivot toward clean energy position it as a cornerstone of long-term passive income. With a dividend yield that has historically exceeded 6% and a track record of 9% compound annual growth in payouts over three decades, Enbridge offers a rare combination of reliability and adaptability in a rapidly transforming energy landscape.

Resilient Business Model: The Foundation of Income Stability

Enbridge's core strength lies in its asset-heavy, fee-based business model. The company operates a vast network of pipelines, storage facilities, and renewable energy projects, generating cash flows from long-term, inflation-protected contracts. For instance, its U.S. pipeline systems transport 20% of the continent's oil and 15% of its natural gas, serving critical markets with limited alternative infrastructure. These regulated operations ensure predictable revenue streams, insulating the company from short-term commodity price swings that plague pure-play energy producers.

Recent financial results underscore this resilience. In Q2 2025, Enbridge reported adjusted EBITDA of $4.6 billion—a 7% year-over-year increase—and maintained a debt-to-EBITDA ratio of 4.7x, reflecting prudent capital management. Distributable Cash Flow (DCF) of $2.9 billion in the quarter, consistent with 2024 levels, further highlights the company's ability to sustain dividends even amid macroeconomic headwinds.

Strategic Clean Energy Diversification: Future-Proofing the Dividend

While Enbridge remains a dominant player in fossil fuel infrastructure, it is aggressively diversifying into renewable energy to align with global decarbonization trends. The company's $32 billion secured growth backlog includes projects like the $900 million Clear Fork Solar facility in Texas and a $100 million expansion of Texas Eastern Transmission. These investments not only mitigate regulatory risks but also open new revenue streams in the green energy sector.

Importantly, Enbridge's clean energy initiatives are designed to complement—not compete with—its core operations. For example, its gas storage facilities are being repurposed to accommodate hydrogen, a key component of future energy systems. This dual strategy ensures that the company's cash flows remain robust even as the energy transition accelerates.

The 6% Yield: A Misunderstood Opportunity

Enbridge's dividend yield currently stands at 2.96%, down from a peak of 6.45% in March 2025. Critics may dismiss the stock as overvalued, but this drop reflects rising share prices—not weaker fundamentals. The company maintains a disciplined payout ratio of 60–70% of DCF, ensuring that dividends are sustainable even during economic downturns. Historically, Enbridge has raised its dividend by 9% annually, a track record that suggests the yield could return to 6% territory if the stock price corrects.

For income-focused investors, this dynamic presents a compelling case. Enbridge's stock currently trades at a discount to its five-year average P/DCF multiple, suggesting undervaluation relative to its cash-generating potential. Meanwhile, peers like TC Energy (TRP) offer yields as low as 1.51%, further highlighting Enbridge's competitive edge.

Investment Implications: A Buy for Long-Term Income

Enbridge's combination of regulated cash flows, clean energy diversification, and disciplined capital allocation makes it an ideal candidate for passive income portfolios. The company's 2025 guidance—$19.4–$20 billion in adjusted EBITDA and $5.50–$5.90 in DCF per share—provides a clear roadmap for sustaining and growing its dividend.

Investors should consider Enbridge as a defensive play in an uncertain market. While the current yield may not scream “high yield,” the company's financial strength, strategic agility, and long-term growth prospects make it a durable source of income. For those seeking to build a resilient dividend portfolio, Enbridge's 6% yield—when factored into a long-term holding period—remains a compelling proposition.

In conclusion, Enbridge exemplifies the kind of business that thrives by balancing tradition with innovation. As the energy transition reshapes the global economy, companies that adapt while maintaining financial discipline will stand out. Enbridge, with its dual focus on infrastructure and sustainability, is poised to deliver consistent returns for decades to come.