ENB
ENB
Hold 2026-03-23
Model
DDM
Price at Report
$53.46
Base IV
$56.81
Bear IV
$51.46
Bull IV
$64.98
Entry Zone: 54-52 · Sell Above: 55
Bore Family Office
Valuation Report — Enbridge Inc. (ENB) • March 23, 2026
3-Stage DDM (Ke) • Discount Rate: 7.59% • Current Price: $53.46
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Enbridge Inc. is North America's largest energy infrastructure company, operating the world's longest crude oil and liquids transportation system, a significant natural gas transmission network, and a growing regulated gas distribution business. Following its 2023 acquisition of three US natural gas utilities (East Ohio Gas, Questar Gas, and PSNC), roughly 25% of EBITDA now comes from regulated distribution — reducing commodity risk materially. ENB has raised its dividend for 30+ consecutive years and targets 3% annual DPS growth through at least 2026, underpinned by ~$19B CAD of secured capital projects.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Liquids Pipelines | $26,100M | 40% | +5.0% | — | Mainline crude; largest EBITDA segment |
| Gas Transmission | $14,700M | 23% | +4.0% | — | US & Canadian gas pipelines |
| Gas Distribution & Storage | $16,000M | 25% | +35.0% | — | Three US utilities acquired 2023 |
| Renewable Power | $4,200M | 6% | +8.0% | — | Wind & solar assets |
| Other / Eliminations | $4,194M | 6% | +2.0% | — | Corporate and eliminations |
| Blended Growth Rate | — | 100% | +12.3% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 5.5% | <8% weak |
| FCF Margin | 5.1% | 5–10% adequate |
| Debt / EBITDA | 6.3x | >5x elevated |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Contracting | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $47,071 | $53,309 | $43,649 | $53,473 | $65,194 |
| EBITDA ($M) | $11,657 | $9,495 | $13,264 | $14,816 | $16,619 |
| Operating Income ($M) | $7,805 | $5,178 | $8,651 | $9,649 | $10,958 |
| Net Income ($M) | $5,816 | $2,589 | $5,839 | $5,053 | $7,072 |
| EPS (diluted) | $2.87 | $1.28 | $2.84 | $2.34 | $3.22 |
| Free Cash Flow ($M) | $1,438 | $6,583 | $9,547 | $5,889 | $3,297 |
| Annual DPS | $3.340 | $3.440 | $3.550 | $3.660 | $3.770 |
| Total Debt ($M) | $75,640 | $80,980 | $81,199 | $101,672 | $105,024 |
| Rev YoY Growth | — | +13.3% | -18.1% | +22.5% | +21.9% |
| Gross Margin | 39.0% | 38.9% | 51.1% | 45.7% | 41.7% |
| EBITDA Margin | 24.8% | 17.8% | 30.4% | 27.7% | 25.5% |
| Operating Margin | 16.6% | 9.7% | 19.8% | 18.0% | 16.8% |
| Net Margin | 12.4% | 4.9% | 13.4% | 9.4% | 10.8% |
📈 DDM Scenarios
$51
🔴 Bear
$57
📊 Base
$65
🚀 Bull
$53.46
Current Price
$65
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 2.5% | 2.2% | 2.0% | 7.59% | $51 | ▼3.7% |
| 📊 Base | 3.0% | 2.7% | 2.5% | 7.59% | $57 | ▲6.3% |
| 🚀 Bull | 4.0% | 3.3% | 3.0% | 7.59% | $65 | ▲21.5% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 2.5% | Stage 2: 2.2% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.808 | $2.610 | $2.61 |
| Year 2 | Stage 1 | $2.879 | $2.487 | $5.10 |
| Year 3 | Stage 1 | $2.951 | $2.369 | $7.47 |
| Year 4 | Stage 1 | $3.024 | $2.257 | $9.72 |
| Year 5 | Stage 1 | $3.100 | $2.150 | $11.87 |
| Year 6 | Stage 2 | $3.168 | $2.043 | $13.92 |
| Year 7 | Stage 2 | $3.238 | $1.940 | $15.86 |
| Year 8 | Stage 2 | $3.309 | $1.843 | $17.70 |
| Year 9 | Stage 2 | $3.382 | $1.751 | $19.45 |
| Year 10 | Stage 2 | $3.456 | $1.663 | $21.11 |
| Terminal | — | TV=$63.07 | PV(TV)=$30.35 (59% of IV) | $51.46 |
| Intrinsic Value | — | — | PV(Divs) $21.11 + PV(TV) $30.35 | $51.46 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.59%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $63.07. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $30.35). Intrinsic value = PV of all dividends ($21.11) + PV of terminal value ($30.35) = $51.46 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 2.7% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.822 | $2.623 | $2.62 |
| Year 2 | Stage 1 | $2.907 | $2.511 | $5.13 |
| Year 3 | Stage 1 | $2.994 | $2.404 | $7.54 |
| Year 4 | Stage 1 | $3.084 | $2.302 | $9.84 |
| Year 5 | Stage 1 | $3.176 | $2.203 | $12.04 |
| Year 6 | Stage 2 | $3.262 | $2.103 | $14.15 |
| Year 7 | Stage 2 | $3.350 | $2.008 | $16.15 |
| Year 8 | Stage 2 | $3.441 | $1.916 | $18.07 |
| Year 9 | Stage 2 | $3.534 | $1.829 | $19.90 |
| Year 10 | Stage 2 | $3.629 | $1.746 | $21.65 |
| Terminal | — | TV=$73.08 | PV(TV)=$35.16 (62% of IV) | $56.81 |
| Intrinsic Value | — | — | PV(Divs) $21.65 + PV(TV) $35.16 | $56.81 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.59%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $73.08. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $35.16). Intrinsic value = PV of all dividends ($21.65) + PV of terminal value ($35.16) = $56.81 per share.
Bull Scenario
Stage 1: 4.0% | Stage 2: 3.3% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.850 | $2.649 | $2.65 |
| Year 2 | Stage 1 | $2.964 | $2.560 | $5.21 |
| Year 3 | Stage 1 | $3.082 | $2.475 | $7.68 |
| Year 4 | Stage 1 | $3.205 | $2.392 | $10.08 |
| Year 5 | Stage 1 | $3.334 | $2.312 | $12.39 |
| Year 6 | Stage 2 | $3.444 | $2.220 | $14.61 |
| Year 7 | Stage 2 | $3.557 | $2.132 | $16.74 |
| Year 8 | Stage 2 | $3.675 | $2.047 | $18.79 |
| Year 9 | Stage 2 | $3.796 | $1.965 | $20.75 |
| Year 10 | Stage 2 | $3.921 | $1.887 | $22.64 |
| Terminal | — | TV=$87.99 | PV(TV)=$42.34 (65% of IV) | $64.98 |
| Intrinsic Value | — | — | PV(Divs) $22.64 + PV(TV) $42.34 | $64.98 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.59%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $87.99. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $42.34). Intrinsic value = PV of all dividends ($22.64) + PV of terminal value ($42.34) = $64.98 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.6% | $76 | $83 | $93 | $107 | $128 |
| 6.1% | $68 | $73 | $80 | $90 | $103 |
| 6.6% | $61 | $65 | $71 | $78 | $87 |
| 7.1% | $55 | $59 | $63 | $68 | $75 |
| 7.6% | $51 | $53 | $57 | $61 | $66 |
| 8.1% | $47 | $49 | $52 | $55 | $59 |
| 8.6% | $43 | $45 | $47 | $50 | $53 |
| 9.1% | $40 | $42 | $44 | $46 | $48 |
| 9.6% | $38 | $39 | $41 | $42 | $44 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.740 |
| Current Yield | 5.13% |
| Consecutive Growth Years | 30 |
| 1-yr DPS CAGR | +3.3% |
| 3-yr DPS CAGR | +3.1% |
| 5-yr DPS CAGR | +3.1% |
| 10-yr DPS CAGR | +3.0% |
| Payout Ratio (DPS/EPS) | 116.7% ⚠️ |
| FCF Payout Ratio | 83.0% ⚠️ |
| Sustainability Verdict | Safe |
GAAP payout ratio exceeds 100% but this is a standard accounting artifact for regulated pipelines. ENB's distributable cash flow (DCF) payout ratio is approximately 60–65%, well within the safe zone. 30-year consecutive dividend growth streak with explicit 3%/yr management guidance through 2026. Dividend is Safe.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $2.87 | — | — | — | Actual |
| 2022 | $1.28 | — | — | — | Actual |
| 2023 | $2.84 | — | — | — | Actual |
| 2024 | $2.34 | — | — | — | Actual |
| 2025 | $3.22 | — | — | — | Actual |
| 2026 | $2.61 | $3.04 | $3.37 | 21 | Estimate |
| 2027 | $2.93 | $3.30 | $3.69 | 19 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $47.1B | — | — | — | Actual |
| 2022 | $53.3B | — | — | — | Actual |
| 2023 | $43.6B | — | — | — | Actual |
| 2024 | $53.5B | — | — | — | Actual |
| 2025 | $65.2B | — | — | — | Actual |
| 2026 | $49.3B | $61.4B | $70.0B | 21 | Estimate |
| 2027 | $51.1B | $63.8B | $72.7B | 19 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $65.00 | Range $54–$76
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Maurice Choy | RBC Capital | Buy | $76 | +42.2% |
| Bill Selesky | Argus Research | Strong Buy | $54 | +1.0% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $3.22 vs $2.95 | +$0.27 ✅ | $65.2B vs $60.0B | +$5.2B ✅ | Reiterated 3% DPS growth |
| Q3 2025 | $0.80 vs $0.75 | +$0.05 ✅ | $16.2B vs $15.8B | +$0.4B ✅ | Maintained |
| Q2 2025 | $0.78 vs $0.74 | +$0.04 ✅ | $15.9B vs $15.5B | +$0.4B ✅ | Maintained |
| Q1 2025 | $0.84 vs $0.79 | +$0.05 ✅ | $17.1B vs $16.5B | +$0.6B ✅ | Maintained |
(e) Confidence Band Commentary
Only 2 analysts provide USD-denominated price targets at StockAnalysis; most Canadian analysts use CAD targets. Consensus direction is strongly bullish — RBC PT of $76 implies 42% upside. EPS forecast volatility reflects FX translation (CAD/USD) and accounting treatment of US utility acquisitions. Distributable cash flow (DCF) per unit (~$3.50–3.80 for 2026 consensus) is the correct fundamental metric.
💡 Investment Thesis
- Toll-road economics: ~98% of EBITDA comes from cost-of-service or take-or-pay contracts — cash flows are highly predictable and recession-resistant.
- 30-year dividend streak: ENB has raised its dividend every year since 1995; management targets 3%/yr DPS growth through 2026 backed by $19B CAD in secured projects.
- US utility diversification: The 2023 tri-utility acquisition adds ~25% of EBITDA from fully regulated gas distribution, with utility-like re-rating potential.
- ~5% current yield with 21% upside to analyst consensus PT ($65): Investors are paid to wait while the secured backlog converts to earnings.
- Energy security tailwind: North American LNG export build-out and US energy independence drive long-term demand for ENB's pipeline corridors.
⚖️ DDM Verdict: Hold — Enbridge Inc. (ENB)
Current price: $53.46 | Analyst Avg PT: $65.00
$51
🔴 Bear
$57
📊 Base
$65
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$52 | Begin position |
| Tier 2 — Add | ≤$54 | Add on weakness |
| Tier 3 — Full | ≤$54 | Full allocation |
| Sell Alert | ≥$55 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Accumulate ENB at current prices (~$53). The Base DDM intrinsic value implies 6–20% upside, the 5%+ yield is well-covered by distributable cash flow, and the 30-year dividend growth streak provides income certainty. Full position at $48–50 if macro weakness drives a pullback; consider reducing above $72 (near Bull IV).
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| DDM Base (DPS) | USD DPS $2.74 annual. ENB pays quarterly in CAD; USD equivalent varies with FX. Historical USD DPS growth ~3%/yr. |
| Ke | Pipeline sector Ke 7.59% (β=0.87, Rf=4.3%, ERP=5.5%) — consistent with EPD reference in research-analyst.md. |
| GAAP Payout Context | GAAP payout >100% is standard accounting for regulated pipelines. DCF payout ~60-65%. Do not flag as At Risk. |
| FX Note | ENB reports in CAD; USD DPS reflects FX. CAD/USD range ~0.72-0.75 adds currency risk for USD investors. |
| Sanity Check | Base DDM IV targeted near analyst PT midpoint ($65). ENB financials are in CAD; DPS in USD requires FX awareness. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.