Where Will Enbridge Stock Be in 3 Years?

Despite its recent sharp gains, Enbridge (TSX:ENB) stock has the potential to continue inching up in the years to come and reward investors with higher dividends.

| More on:
oil and gas pipeline

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After declining by nearly 10% in 2023, Enbridge (TSX:ENB) stock seems to be regaining strength in recent months. ENB stock has gone up by more than 12% over the last seven months to currently trade at $49.53 per share with a market cap of $104.8 billion. At this market price, it offers an impressive 7.4% annualized dividend yield and distributes these dividend payouts every quarter.

But can Enbridge continue to deliver strong returns to investors in the years ahead? Before discussing where the stock might stand three years from now by looking at the factors that are likely to influence Enbridge’s future performance, let’s first review the drivers of its recent recovery.

Key factors helping Enbridge stock recover

The main reason for Enbridge stock’s recent recovery could be the resilience of its core business, which consists of transporting and storing crude oil and natural gas across North America. Despite the challenges posed by warmer weather and largely weaker commodity prices in recent quarters, the company is continuing to maintain positive earnings growth, robust cash flows, and dividends.

Created with Highcharts 11.4.3Enbridge PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

In the first quarter of 2024, Enbridge’s total revenue fell 8.6% YoY (year over year) to around $11 billion as significantly warmer weather affected the performance of its gas distribution and storage segment. Nevertheless, despite this negative factor, along with higher operating costs, the company’s adjusted quarterly earnings jumped by 8.2% YoY to $0.92 per share, beating Street analysts’ expectations of $0.81 per share. Similarly, its adjusted net profit margin expanded to 17.7% in the latest quarter from 14.3% a year ago.

These positive factors might have supported a recovery in Enbridge’s stock price in recent months, as investors might have appreciated its strong earnings potential despite unfavourable market conditions.

Where will Enbridge stock be in three years?

Besides continued strength in its core energy transportation business, Enbridge, in recent years, has increased its focus on further diversifying its revenue stream. This is one of the key reasons why the company is investing in segments like crude oil export and renewable energy.

Also, its strong cash flows and robust financial position give it the ability to invest in future growth. For example, in the first quarter, Enbridge completed the acquisition of The East Ohio Gas Company (known as Enbridge Gas Ohio now) in a deal worth US$6.6 billion, which is expected to improve its position in the gas distribution market and help it accelerate financial growth trends.

While it’s nearly impossible for anyone to accurately predict where Enbridge stock will be three years from now, its strong fundamentals and diverse revenue streams indicate that it has a bright future ahead, which can help its share prices continue soaring in the coming years. That said, if you expect to multiply your invested money in a short period of time, ENB stock might not be the best option for you. However, if you are looking for a long-term investment that can provide you with a steady dividend income and capital appreciation, then you might want to consider adding Enbridge stock to your portfolio. Also, the fact that it has a solid track record of increasing its dividends for 29 consecutive years makes it even more appealing for long-term income investors.

Should you invest $1,000 in Enbridge right now?

Before you buy stock in Enbridge, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Enbridge wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Energy Stocks

oil pump jack under night sky
Energy Stocks

9.3% Dividend Yield? Buy This Top-Notch Dividend Stock in Bulk!

A 9.3% dividend yield? That's pretty drool worthy, if you ask me. But what should investors first consider?

Read more »

Dam of hydroelectric power plant in Canadian Rockies
Energy Stocks

3 No-Brainer Energy Stocks to Buy Right Now for Less Than $100

These energy stocks are top choices for investors, and yet still offer diversification and income.

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

Outlook for TC Energy Stock in 2025

Besides its excellent track record of raising dividends for 25 consecutive years, TC Energy’s (TSX:TRP) expanding natural gas footprint across…

Read more »

Oil industry worker works in oilfield
Energy Stocks

Dividend Investors: Top Canadian Energy Stocks for March

These four energy stocks not only increased dividends, but they also have solid outlooks.

Read more »

nuclear power plant
Energy Stocks

1 Magnificent Canadian Stock Down 31% to Buy and Hold Forever

Cameco stock may be down from its highs, but don't think it can't come back from these lows.

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

Better Pipeline Stock: Enbridge vs TC Energy?

Enbridge and TC Energy are giving back some gains. Is one now oversold?

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Energy Stocks

Got $2,500? 3 Energy Stocks to Buy and Hold Forever

Long-term investors shouldn’t be overlooking the beaten-down renewable energy sector today.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

2 No-Brainer Energy Stocks to Buy With $1,000 Right Now

These two energy stocks not only reward their shareholders with strong dividend payouts but also have solid long-term growth potential.

Read more »