Enbridge says cash flow covers dividend as profit nearly doubles

Enbridge’s third-quarter profit nearly doubles

Enbridge reported third-quarter GAAP net income of nearly C$1.3 billion, up 89% from C$682 million a year earlier. GAAP earnings per share rose to C$0.59 from C$0.30, although non-cash derivative gains contributed substantially to the increase. Adjusted earnings reached nearly C$1.1 billion, while adjusted EPS increased 6.5% to C$0.49 from C$0.46.

The pipeline and utility operator also reported C$4.4 billion of adjusted EBITDA, up 3.9% year over year. Distributable cash flow rose 4.8% to C$2.7 billion, providing the cash-flow measure used to assess coverage of Enbridge’s dividend.

Distributable cash flow supports the payout

Enbridge’s C$2.7 billion of distributable cash flow was more than twice its reported earnings. Based on the quarterly figures, the dividend payout ratio was 79%, according to an analysis of the company’s results. Using the midpoint of the company’s 2026 guidance, the ratio was calculated at 66%, within its 60%-70% target range.

The analysis also said Enbridge generates C$5 billion to C$6 billion in annual post-dividend free cash flow. It estimated that the company could fund more than C$10 billion in new investments annually by adding balance-sheet capacity while remaining within its targeted leverage ratio range. That capacity supports management’s expectation of approximately 5% annual growth in distributable cash flow per share, which the analysis said could support similar dividend growth.

The company has increased its annual dividend in Canadian dollars for 31 consecutive years, according to the same analysis.

Gas operations drove adjusted growth

Enbridge’s natural gas businesses provided the strongest segment performance in the reported quarter. Gas Transmission adjusted EBITDA increased 13% to C$1.4 billion, while Gas Distribution and Storage adjusted EBITDA grew 19% to C$665 million. Rate-case settlements involving major pipelines, including East Tennessee Natural Gas and Texas Eastern Transmission, supported the results.

Liquids Pipelines was weaker, with adjusted EBITDA declining 4.4% to C$2.2 billion. Growth across the natural gas operations offset that decline. Enbridge also placed approximately C$3 billion of natural-gas transmission projects into service during the quarter, including the Aspen Point expansion in British Columbia and the Tennessee Ridgeline project.

Guidance is reaffirmed

Enbridge maintained its full-year 2026 guidance for adjusted EBITDA at C$20.2 billion to C$20.8 billion and distributable cash flow per share at C$5.70 to C$6.10. Its medium-term outlook calls for approximately 5% annual growth in adjusted EBITDA, distributable cash flow per share and EPS.

The company’s secured growth backlog stood at C$38 billion. Enbridge said it was positioned to meet its target of C$10 billion to C$20 billion in new project announcements through 2027.

Leadership transition is planned

Chief executive Greg Ebel plans to retire on December 31, with Michele Harradence scheduled to succeed him on January 1, 2027. Harradence currently leads Enbridge’s Gas Distribution and Storage business.

Separately, Enbridge crews responded to a damaged natural-gas line near 3rd Avenue East in Owen Sound, Ontario, on Monday. The supporting report did not provide information about the scale of the leak, service disruption or any financial impact.