Enbridge Inc. (TSX:ENB) is one of Canada’s leading energy infrastructure companies. Today, Enbridge’s stock price trades at a mere $48 per share, or 15 times next year’s earnings. This compares to Tesla Inc. (NASDAQ:TSLA) stock, which trades at $214 per share, or 44 times next year’s earnings.
With Enbridge, we get a predictable and growing business that’s protected by strong barriers to entry. With Tesla, on the other hand, we get a lot of uncertainty and growing competition, placing its business at risk.
So, let’s consider the question – will Enbridge stock be worth more than Tesla by 2026?
Enbridge’s business is growing and diversifying
Enbridge transports and distributes oil and gas in its extensive North American pipeline system. In fact, Enbridge moves about 30% of North America’s crude oil. It also transports nearly 20% of the natural gas consumed in the U.S.
In recent years, the company has made efforts to diversify its business in response to the pressing need for renewable, clean energy. Investments in areas such as liquified natural gas, storage, and offshore wind are securing Enbridge’s future growth.
Also, Enbridge’s recent acquisition of three U.S. natural gas utilities will provide additional low-risk, regulated revenue. This will help strengthen the balance sheet and further position Enbridge for the energy transition.
These strategic moves are setting Enbridge up for long-term growth and success.
Tesla’s market share is declining
The problem with Tesla is mainly that competition in the electric vehicle market is intense. Hyundai/Kia, for example, captured the number two spot in U.S. electric vehicle sales last year. In fact, the company’s growth in electric vehicles outpaced both Tesla and the broader electric-vehicle market last year.
This has been something that the company has been aggressively working on in the last few years. Today, Hyundai offers a broad line-up of almost 10 electric vehicles, with battery technology that has faster charging. In contrast, Tesla offers four different types of electric vehicles at this time.
So what this means for Tesla is that its market share is slipping as competitors such as Hyundai rise. In fact, Tesla’s share of the U.S. electric vehicle market fell to 55% last year while Hyndai/Kia’s share stands at approximately 8%.
To make matters worse for Tesla, competition from more players is expected to explode in the next year as the number of electric vehicle models available for sale is expected to almost double to approximately 100. The market is clearly heating up, and the road ahead will be increasingly more difficult for Tesla.
Tesla stock is likely headed for a fall
Given all of this information, it appears likely that Tesla’s stock price is at risk. At the very least, it appears that the risk/reward proposition of Tesla is quickly deteriorating. There’s nothing like a hyper competitive market to destroy a company’s advantage. And this appears to be what is brewing in the electric vehicle market.
So, with Tesla’s advantage slowly being chipped away, its multiple and earnings forecasts will likely decline. To be fair, it’s extremely difficult to predict 2026 earnings in this environment that’s so fast changing. Yet, it’s not a stretch to say that Tesla’s stock price will get hit in the next couple of years.
In contrast, Enbridge remains the beacon of predictability. Steady growth over the next couple of years, mixed with continued advancement of its growth strategy, can very likely send Enbridge’s stock price significantly higher.
