Executive Summary / Key Takeaways

• Enbridge Inc. (ENB) stands as a diversified energy infrastructure leader, leveraging its low-risk, utility-like business model and extensive asset footprint to deliver predictable cash flows and consistent shareholder returns across market cycles.
• Recent performance, including record Q1 2025 EBITDA, DCF per share, and earnings per share, demonstrates the strength of its integrated operations and the accretive impact of strategic acquisitions, particularly the U.S. Gas Utilities.
• The company is strategically positioned to capitalize on secular demand trends in North America, including growing needs for natural gas in power generation (data centers, coal-to-gas switching), LNG exports, and renewable energy, supported by a robust $28 billion secured growth backlog.
• ENB maintains a strong balance sheet, having fully funded its recent utility acquisitions, and is committed to an equity self-funding model for its substantial annual growth program while targeting a debt-to-EBITDA range of 4.5x to 5x.
• Management reaffirmed its 2025 financial guidance (Adjusted EBITDA $19.4B-$20B, DCF/share $5.50-$5.90) and midterm outlook (7-9% EBITDA growth through 2026), underpinned by utility contributions, asset in-service dates, and operational performance, despite potential macroeconomic volatility.

Setting the Scene: Enbridge's Enduring Infrastructure and Strategic Foundation

Enbridge Inc. is a cornerstone of North America's energy landscape, operating a vast network of pipelines, terminals, and power generation facilities. Founded in 1949, the company has evolved into a diversified energy infrastructure giant with four core franchises: Liquids Pipelines, Gas Transmission, Gas Distribution and Storage, and Renewable Power Generation. This structure is built upon a foundational strategy emphasizing a low-risk, utility-like business model designed to deliver stable, predictable cash flows across various economic and commodity cycles.

At its heart, Enbridge's model relies on highly contracted or regulated assets, with over 98% of its EBITDA protected by cost-of-service frameworks or long-term take-or-pay agreements. This commercial structure, coupled with a customer base that is over 95% investment grade and assets providing inflation protection for over 80% of EBITDA, forms a robust defense against market volatility. The company's history of strategic expansion, including significant recent acquisitions like the three U.S. Gas Utilities from Dominion Energy (D) and key Permian Basin assets, has solidified its position as a leading energy provider, connecting vital supply basins to major demand centers and export markets.

In the competitive North American energy infrastructure sector, Enbridge stands alongside major players such as TC Energy (TRP), Kinder Morgan (KMI), Williams Companies (WMB), and ONEOK (OKE). While competitors like TC Energy and Williams Companies have strong focuses on natural gas transmission, and Kinder Morgan and ONEOK hold significant positions in midstream and processing, Enbridge differentiates itself through its unique scale, asset interconnectivity, and broad diversification across liquids, gas, and renewables. This integrated approach allows ENB to offer comprehensive energy solutions, positioning it as a "first choice" provider for customers and partners seeking reliability and diverse service offerings.

While some competitors may exhibit slightly lower operating costs per unit in specific segments due to scale or specialization (e.g., Kinder Morgan's cost efficiency), Enbridge leverages its technological capabilities and operational excellence to drive overall efficiency and reliability across its complex network. The company highlights its utilization of technology and innovation to enhance operational performance, including advanced monitoring systems in its pipelines. While specific proprietary technology names are not detailed, management emphasizes the tangible benefits of these efforts, contributing to high asset utilization and efficient project execution. Ongoing R&D and development efforts, particularly in renewables and gas infrastructure, are aimed at capitalizing on new market opportunities and enhancing the long-term value proposition.

Performance Reflecting Strategic Execution and Demand Strength

Enbridge's financial performance in the first quarter of 2025 underscored the effectiveness of its strategy and the strength of its diversified asset base. The company reported record EBITDA, DCF per share, and earnings per share. Adjusted EBITDA reached $5,929 million in Q1 2025, a significant increase from $4,049 million in Q1 2024. Earnings attributable to common shareholders rose to $2,261 million ($1.04 per share) in Q1 2025, compared to $1,419 million ($0.67 per share) in the prior year period.

This strong performance was driven by a combination of factors. Contributions from the recently acquired U.S. Gas Utilities were a major catalyst, with a full quarter of ownership significantly boosting the Gas Distribution and Storage segment's EBITDA to $1,600 million in Q1 2025, up from $765 million in Q1 2024. Favorable weather conditions in Ontario in Q1 2025 also provided a positive impact compared to the prior year. The Liquids Pipelines segment saw higher contributions from the Mainline and Line 9, supported by strong throughput and a positive impact from a litigation settlement, contributing $2,593 million in EBITDA in Q1 2025 versus $2,404 million in Q1 2024. The Gas Transmission segment's EBITDA increased to $1,473 million from $1,265 million, benefiting from favorable contracting on U.S. assets and increased revenue from rate case settlements (Algonquin, Texas Eastern). The favorable translation effect of U.S. dollar earnings at a higher average exchange rate also contributed positively.

While these gains were partially offset by higher interest expense due to increased debt balances, higher depreciation and amortization from the acquired utilities, and higher income tax expense commensurate with increased earnings, the overall picture is one of robust growth and operational delivery. The company's ability to integrate significant acquisitions rapidly and realize immediate contributions highlights its execution capabilities.

Liquidity remains strong, with $13.4 billion in net available liquidity as of March 31, 2025, supported by $24.2 billion in committed credit facilities. The company has successfully completed the funding for its U.S. Gas Utilities acquisitions and is committed to an equity self-funding model for its future growth program, eliminating the need for further public equity issuances for this purpose. This financial flexibility supports its capital allocation priorities: maintaining a strong balance sheet (targeting 4.5x-5x Debt-to-EBITDA), sustainably growing the dividend (extending a 29-year track record), and investing in disciplined, low-risk growth opportunities.

Competitive Dynamics and Strategic Positioning

Enbridge operates within a dynamic and competitive energy infrastructure market. Its primary competitors, including TC Energy, Kinder Morgan, Williams Companies, and ONEOK, each possess significant asset footprints and strategic focuses.

• Against TC Energy: While TRP is a major player in North American gas pipelines, ENB's broader diversification across liquids, gas, and renewables provides a more resilient and integrated business model. ENB's recent strategic tuck-in acquisitions in the Permian and Gulf Coast enhance its competitive stance in key growth areas for both liquids and gas exports, directly competing with TRP's gas transmission focus. ENB's emphasis on energy transition opportunities, such as RNG and renewable power generation, positions it favorably in evolving markets compared to TRP's more traditional gas-centric approach.
• Against Kinder Morgan: KMI is a formidable competitor in U.S. midstream and liquids. While KMI is known for cost efficiency, ENB's integrated value chain, from supply basin to export terminal (e.g., Mainline to Ingleside), offers a differentiated service. ENB's investments in renewables and gas utilities provide exposure to demand centers and growth vectors that are less central to KMI's portfolio. ENB's technological approach, while not detailed in specific proprietary names, focuses on operational reliability and efficiency across diverse asset types, complementing its broad service offering.
• Against Williams Companies: WMB is a strong competitor in U.S. natural gas transmission. ENB's gas transmission network, bolstered by recent Permian acquisitions and expansions, directly competes with WMB for market share in connecting supply to demand. ENB's diversification beyond gas transmission, particularly into utilities and renewables, provides a broader platform for growth and risk management compared to WMB's more concentrated focus.
• Against ONEOK: OKE is a key player in gas gathering and processing. ENB's investments in the DBR system and Whistler JV enhance its presence in this area, complementing its transmission assets and creating a more integrated gas value chain that competes with OKE's offerings.

Enbridge's competitive advantages stem from its scale, asset interconnectivity, and diversified business model. The ability to offer integrated solutions across different energy types and geographies attracts blue-chip customers and provides resilience. While facing competition in specific segments, ENB's strategic positioning, including its focus on high-growth areas like the Permian and U.S. Gulf Coast, its significant storage footprint, and its growing presence in renewables and gas utilities, allows it to capture opportunities across the energy value chain. The company's strong relationships with regulators and indigenous groups, demonstrated by successful project approvals and partnerships, also provide a competitive edge in project development and execution.

Outlook, Guidance, and Growth Trajectory

Enbridge's management reaffirmed its 2025 financial guidance, projecting Adjusted EBITDA between $19.4 billion and $20 billion and DCF per share between $5.50 and $5.90. This outlook is underpinned by several key drivers:

• Full-Year Utility Contributions: The U.S. Gas Utilities acquired in 2024 (EOG (EOG), Questar/Wexpro, PSNC) are expected to provide a full year of EBITDA contributions in 2025, significantly boosting results compared to the partial-year impact in 2024.
• New Assets in Service: Projects recently completed or expected to enter service in late 2024 and 2025, such as the Venice Extension (supplying Plaquemines LNG), the first stage of Sequoia Solar, and Orange Grove Solar, will contribute incremental EBITDA.
• Operational Performance & In-Footprint Initiatives: Continued strong utilization across the Liquids and Gas Transmission systems, coupled with ongoing efficiency improvements and optimization projects (like Mainline optimization and Gray Oak expansion), are expected to support base business growth.
• Rate Case Outcomes: Expected decisions on rate cases for the U.S. Gas Utilities (Ohio, North Carolina, Utah) in 2025 are anticipated to support fair returns and future investment.

Management noted potential tailwinds for 2025, including contributions from the Matterhorn Express Pipeline acquisition, favorable US-Canadian exchange rates (though heavily hedged), and colder weather experienced early in the year. Potential headwinds include U.S. interest rates remaining higher than initially projected. However, the company expressed confidence that these factors are unlikely to materially impact the reaffirmed guidance ranges.

Beyond 2025, Enbridge reaffirmed its near-term financial outlook, targeting 7% to 9% EBITDA growth through 2026 and approximately 3% DCF growth per share. The company's secured growth backlog stands at a robust $28 billion, with approximately $8 billion to $9 billion expected to be deployed annually. This backlog is diversified across all segments and includes significant projects like the Aspen Point T-North expansion ($1.2B), Texas Eastern Modernization (US$0.4B), Tennessee Ridgeline Expansion (US$1.1B), Woodfibre LNG (equity contribution US$0.9B), Moriah Energy Center (US$0.6B), T-15 Reliability Project (US$0.7B), Sequoia Solar (US$1.1B), and Calvados Offshore Wind (equity contribution $0.3B).

Future growth opportunities are strongly linked to secular demand trends. The increasing need for reliable power generation, driven by data centers and coal plant retirements, presents significant opportunities for both the Gas Transmission and Gas Distribution segments. Management highlighted being within 50 miles of 45% of North American gas power generation and seeing substantial inquiries for new gas transmission capacity to serve power demand. The Renewable Power segment is also positioned to benefit, with over 2 GW of solar and wind projects in development capable of serving data center load, supported by long-term PPAs and expected mid-teens returns (PTC). Growing LNG export capacity from North America provides further demand pull for gas transmission assets, while continued WCSB production growth supports liquids pipeline expansions. The company's average 8% annual rate-based growth expectation for its U.S. gas utilities underscores the embedded, low-risk growth within this segment.

Risks and Challenges

Despite its resilient business model and positive outlook, Enbridge faces several risks. Regulatory and legal challenges, particularly concerning pipeline operations like Line 5 and DAPL, could impact operations and require significant resources to resolve. While management believes the resolution of current legal proceedings will not have a material impact on financial results, these cases introduce uncertainty.

The potential for adverse effects from U.S., Canadian, and other governments' trade policies and tariffs could impact macroeconomic conditions, increase costs, or potentially reduce demand, although management currently views the direct financial impact as negligible due to the essential nature of energy flows and contractual protections. Fluctuations in interest rates could affect financing costs, although hedging programs mitigate a significant portion of this exposure. Weather variability can impact gas distribution volumes, as seen in the comparison between Q1 2025 and Q1 2024 results for Enbridge Gas Ontario. Operational risks, including system reliability and safety, are inherent in energy infrastructure, although the company emphasizes its focus on operational excellence and integrity management. The ability to execute its large secured growth program on time and budget is also subject to risks related to labor, materials, and regulatory approvals.

Conclusion

Enbridge Inc. presents a compelling investment thesis grounded in its robust, low-risk energy infrastructure model and strategic positioning to capitalize on growing North American energy demand. The company's recent record financial performance, driven by strong base business utilization and the accretive impact of its U.S. Gas Utilities acquisitions, demonstrates the resilience and earnings power of its diversified portfolio. With a significant secured growth backlog focused on essential energy infrastructure and opportunities tied to secular trends like power generation and LNG exports, Enbridge has visible pathways for future growth.

While facing ongoing legal and regulatory challenges and potential macroeconomic headwinds, the company's predictable cash flows, strong balance sheet, and disciplined capital allocation strategy support its commitment to sustainable dividend growth and equity self-funding. Enbridge's unique scale, asset interconnectivity, and integrated approach across liquids, gas, and renewables provide key competitive advantages in a demanding energy market. For investors seeking a combination of attractive yield, stability, and visible growth underpinned by critical energy infrastructure, Enbridge remains a first-choice consideration.