Why Enbridge's Five-Year Performance Outpaced Expectations (When Dividends Matter)

The Numbers Tell an Interesting Story

On paper, Enbridge (NYSE: ENB) looks like it underperformed the S&P 500 over the past three to five years. Stock price alone shows a 39.9% five-year gain versus the S&P 500’s 86.6%. But there’s a catch — and it’s a substantial one.

When you factor in dividend reinvestment, Enbridge’s total return jumps to 94.4% over five years, decisively beating the broader market. That 54.5-percentage-point gap between price appreciation and total return? That’s the power of a 5.8% dividend yield compounding year after year.

Strategic Moves Driving the Engine

Enbridge’s transformation over the past five years hasn’t been flashy, but it’s been methodical. The company restructured its entire portfolio through a dual approach:

Organic expansion across four core platforms: The company systematically invested in liquids pipelines, gas transmission networks, gas distribution infrastructure, and renewable energy. This included building new natural gas pipelines, expanding oil transportation capacity, and developing offshore wind projects in Europe.

Transformational acquisitions: The headline move came in 2023 when Enbridge acquired three U.S. natural gas utilities from Dominion for $14 billion. This single transaction fundamentally reshuffled its earnings composition.

How the Portfolio Shifted

The Dominion acquisition didn’t just add assets — it rebalanced Enbridge’s entire business model:

The shift away from cyclical liquids pipelines toward stable gas distribution created more predictable cash flows. This stability allowed the company to extend its dividend growth streak to 31 consecutive years and maintain consistent per-share improvements.

Growth at a Sustainable Pace

Enbridge isn’t a high-growth story in the traditional sense. Earnings, cash flow per share, and dividend growth have advanced at low-to-mid single-digit compound annual rates. In today’s market obsessed with explosive returns, this might sound boring.

Yet that moderate pace is precisely what enabled the dividend to remain sustainable and continuously increase. This created the conditions for market-beating total returns — not through wild stock price swings, but through reliable income compounding.

The Takeaway

Enbridge has positioned itself as a stable infrastructure play in a volatile energy landscape. It transports roughly 30% of North American crude oil and nearly 20% of U.S. natural gas consumption. That scale, combined with its recent pivot toward gas utilities, has given the company a moat in essential infrastructure.

The company’s five-year track record suggests that steady, dividend-driven strategies can outperform in ways that stock price alone doesn’t capture. Whether that formula continues to work depends partly on whether energy infrastructure remains a defensive haven in uncertain times.