Enbridge Inc. shares reached a fresh 52-week high on Tuesday, rising 2.76% to C$78.25, even as a Wisconsin judge ordered a partial pause in construction on the company's contentious Line 5 pipeline reroute. The stock's advance outpaced the broader Canadian market, with the S&P/TSX Composite slipping 0.1% amid renewed inflation concerns.
The rally came as Enbridge reaffirmed its 2026 financial guidance, which calls for adjusted EBITDA between C$20.2 billion and C$20.8 billion and distributable cash flow per share of C$5.70 to C$6.10. The company also highlighted a growing project backlog of approximately C$40 billion, including new developments such as a Texas wind facility linked to Meta's data centers, a Tres Palacios gas-storage expansion, and additional storage at Ontario's Dawn Hub.
Chief Executive Greg Ebel recently described the current growth opportunities as the best he has seen in 10 to 15 years, with Enbridge eyeing $10 billion to $20 billion in potential new capital investments over the next 24 months, driven by demand for crude exports, natural gas, utility infrastructure, and power supply for data centers.
The legal setback on Line 5, however, introduced a fresh element of uncertainty. A Wisconsin judge allowed most construction to proceed on the 41-mile reroute but halted work at certain water crossings where additional permits are needed. The judge noted that the company's position at four crossings 'may be on tenuous legal footing.' Enbridge spokesperson Juli Kellner called the ruling an important decision that permits work to continue, emphasizing that state permits followed a rigorous four-year review by the Wisconsin Department of Natural Resources and a year-long independent review.
Line 5 carries up to 23 million gallons of oil daily, and the proposed reroute would cross about 200 waterways and affect approximately 100 acres of wetlands. The project has been a focal point for environmental groups and has faced legal challenges for years.
Meanwhile, rising bond yields added another layer of pressure. Canadian 10-year government bond yields rose to 3.706%, while comparable U.S. yields climbed to 4.6273%, increasing financing costs for capital-intensive pipeline projects and potentially making dividend stocks less attractive. Enbridge's quarterly dividend of C$0.9700 per share, payable June 1, offers a yield near 4.96%, which continues to support the stock.
Despite these headwinds, investors appear willing to reward Enbridge's stable, regulated cash flows and scale advantage. The company moves about 30% of North American crude oil and 20% of U.S. natural gas consumption, positioning it well at a time when energy security is back in focus. Pembina Pipeline shares also rose 1.37% on Tuesday, though Enbridge's gain was stronger.
Looking ahead, the key tests for Enbridge will be whether it can keep the Line 5 project timetable intact, how bond yields evolve, and whether investors continue to favor pipeline cash flows amid ongoing legal and permitting battles.
