Why Enbridge's Low-Risk Customer Base is a Win for Shareholders

Enbridge Inc. ENB in its first-quarter 2025 update claimed that more than 95% of its customers have an investment-grade credit profile. This means that most of the companies it does business with have been given strong credit ratings by independent agencies like Moody’s or S&P. This indicates how creditworthy their customers are, which in turn signifies clients with high credit ratings will probably never miss payments for the midstream services they are getting from ENB.  Thus, it can be said that the customers' strong financial standing signifies stable and predictable income for Enbridge.This predictable cash flow is supporting ENB’s stable business model. With most of the contracts being long-term, and the customers having a high credit profile, Enbridge’s overall activities have lower vulnerability to the volatility in oil and natural gas prices and uncertainty in the energy business.The midstream energy giants' stability in business secures stable and sustainable returns for shareholders. Enbridge has already rewarded shareholders with three decades of consecutive dividend increases. In the coming years, ENB will likely continue to reward its shareholders with attractive dividend yields, backed by its stable business model. Currently, ENB’s dividend yield of almost 6% is higher than the 5.2% yield of the composite stocks belonging to the industry.Do EPD & KMI Also Have a High-Credit-Profile Customer Base?Like ENB, both Kinder Morgan KMI and Enterprise Products Partners LP EPD have a stable business model and are midstream energy majors. Both KMI and EPD are paying higher dividend yields than the oil-energy sector. While KMI’s current yield of 4.3% is higher than the sector’s 4.1%, EPD rewards unitholders with a 6.8% yield.Most of the time, both Kinder Morgan and Enterprise Products have been rewarding investors with higher yields than the sector over the past several years. This reflects the midstream players’ stable business model, likely backed by customers with a handsome credit profile.ENB’s Price Performance, Valuation & EstimatesShares of Enbridge have gained 37.6% over the past year, outpacing the 34.9% rally of the composite stocks belonging to the industry. Image Source: Zacks Investment ResearchFrom a valuation standpoint, ENB trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 15.20X. This is above the broader industry average of 13.93X. Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for ENB’s 2025 earnings hasn’t been revised over the past seven days. Image Source: Zacks Investment ResearchENB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report Enbridge Inc (ENB): Free Stock Analysis Report Kinder Morgan, Inc. (KMI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks