- Business Model: Strong (Meets criteria ☑). The company is an integrated oil & gas producer with diversified assets across Canada, which is considered simple and understandable.
- Economic Moat: Moderate (Marginal/Close to threshold ⚠️). The company benefits from scale and low-cost advantages, but its exposure to commodity prices limits its pricing power, making the moat acceptable but not exceptional.
- Management Quality: Strong (Meets criteria ☑). Management is shareholder-friendly, demonstrated by a 24-year dividend growth streak, 12% insider ownership, and disciplined capital allocation.
- Return on Equity - 10yr avg (%): 22.3% (Meets criteria ☑). This is consistently above the preferred 15% threshold.
- Return on Equity - Current TTM (%): 18.5% (Meets criteria ☑). The current ROE as of Q3 2025 maintains strong capital efficiency.
- Operating Margin - 10yr avg (%): 15.8% (Meets criteria ☑). The 10-year average is above the 12% target despite commodity cycles.
- Operating Margin - Current TTM (%): 12.2% (Meets criteria ☑). The current margin was compressed by 2024 price weakness but is recovering and meets the >12% target.
- Debt/Equity Ratio: 0.38 (Meets criteria ☑). This is conservative leverage, well below the preferred 0.5 threshold.
- Current Ratio: 1.9 (Meets criteria ☑). Strong liquidity at 1.9x comfortably covers short-term obligations, exceeding the >1.5 preference.
- Free Cash Flow - 5yr avg (trend): $5.8B (stable) (Meets criteria ☑). The 5-year average FCF shows a stable trend, supporting dividends and debt reduction.
- Earnings Growth - 10yr CAGR (%): 8.3% (Marginal/Close to threshold ⚠️). The 10-year EPS CAGR is below the preferred 10% target, primarily due to the 2020 oil crash impact.
- Dividend Yield - Current (%): 4.8% (Meets criteria ☑). The current yield as of Oct 2025 is sustainable with a 48% payout ratio, exceeding the >4% preference.
- Dividend Growth Streak (years): 24 years (Meets criteria ☑). The 24 consecutive years of dividend increases demonstrate a strong commitment to shareholders.
- P/E Ratio - Current TTM: 11.2 (Meets criteria ☑). The P/E of 11.2 is below the preferred <15 and trades at a discount to the sector median of 13.5.
- Intrinsic Value (DCF) - per share: $52.30. This was calculated using a $5.8B FCF, 4% growth rate, 9% WACC, and 2.5% terminal rate.
- Intrinsic Value (P/E) - per share: $48.20. This was calculated using the 10-year median P/E of 13.5x multiplied by the 10-year average EPS of $3.57.
- Intrinsic Value (P/B) - per share: $45.80. This was calculated using the industry median P/B of 1.6x multiplied by the current book value of $28.63.
- Current Stock Price: $42.15 (As of Oct 30, 2025).
- Margin of Safety - Range: 8% to 24% (Marginal/Close to threshold ⚠️). The MOS range (8% vs P/B to 24% vs DCF) is below the preferred >25% for a "Strong Buy" but is positive across all methods.
- Final Recommendation: HOLD (Marginal/Close to threshold ⚠️). The recommendation is to HOLD because it is a quality business with solid fundamentals, but the limited margin of safety suggests a better entry point would be below $40.
- Final Recommendation (BUY/HOLD/AVOID): HOLD (Marginal/Close to threshold ⚠️). The final recommendation is HOLD.
Have other thoughts on Enbridge?
Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.
Create NarrativeHow well do narratives help inform your perspective?
Disclaimer
The user andy_c holds no position in TSX:ENB. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
