Enbridge (NYSE: ENB) has been unstoppable over the years. The Canadian pipeline and utility operator has increased its dividend annually for nearly three decades. Fueling that unstoppable growth has been its ability to continue expanding its operations and cash flow by growing its energy infrastructure platforms.
The energy company has secured several new sources of growth this year. It should have plenty of fuel to increase its 6.5%-yielding dividend in the coming years.
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This year has been a transformational one for Enbridge. It has become North America’s largest natural gas utility operator by acquiring three gas utilities from Dominion. The company wrapped up the final purchase in the third quarter, closing its $3.2 billion acquisition of Public Service Company of North Carolina. It now distributes 9.3 billion cubic feet of natural gas per day to over 7 million customers in the U.S. and Canada. Gas distribution now supplies 22% of the company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), up from 12% before the deals.
Those acquisitions helped fuel an 8% increase in its adjusted EBITDA during the second quarter. Meanwhile, they should help power its growth for the next several years. Enbridge expects its recently acquired gas utilities to grow their rate base at an 8% compound annual rate through 2027. There’s more growth potential in the long term, fueled by increasing gas demand to support data centers.
Those needle-moving acquisitions weren’t the only ones Enbridge has secured this year. The company also recently closed the $200 million purchase of additional docks and land adjacent to the Enbridge Ingleside Energy Center. The company expects this transaction to unlock future optimization and expansion opportunities at the facility.
Enbridge also acquired a 15% interest in the Delaware Basin Residue pipeline system in West Texas during the third quarter. That deal will extend its Permian strategy and customer service offering. This acquisition further built on an earlier agreement to enhance its Permian gas value chain when it entered into a joint venture for stakes in the Whistler and ADCC pipelines.
Enbridge’s acquisitions alone could help fuel growth for years to come. However, that hasn’t stopped it from securing several more organic expansion projects this year, including three new ones over the past few months: