Canadian energy infrastructure companies Enbridge (ENB) and TC Energy (TRP) reported Q4 2025 results this past Friday, the last day of trading before the holiday weekend.
The former’s standard deviation was 3.38 with a 3.94% gain on the day, while the latter’s standard deviation was 2.75 with a 3.49% gain. While neither share price gain was earth-shattering, both stocks saw share volumes significantly above their 30-day averages.
The cause of the gains: healthy Q4 2025 results released before markets opened on Friday. Both have the potential to go on nice runs heading into the final month of 2026’s first quarter.
And while both are excellent businesses -- they’re both Strong Buys according to Barchart’s Technical Opinion -- Enbridge is a better buy than TC Energy.
Here’s why.
Both Have Positive Free Cash Flow
Enbridge and TC Energy pay annual dividends of $2.69 and $2.48 a share, respectively.
The former paid out CAD$8.22 billion ($6.0 billion) in common share dividends in 2025, the 3oth consecutive annual increase. Over those 30 years, it increased the annual dividend at a 9% compound annual growth rate (CAGR).
The latter paid out CAD$3.51 billion ($2.56 billion) in common share dividends in 2025, the 26th consecutive annual increase. It looks to increase its annual dividend by 3-5% every year. Both are supported by growth in free cash flow. Without this growth, dividend increases are less likely.
In 2025, Enbridge’s free cash flow was CAD$3.30 billion ($2.41 billion), after taking into account a 34% increase in capital expenditures. Meanwhile, TC Energy’s free cash flow was CAD$2.08 billion ($1.52 billion), after accounting for a 16% decrease in capital expenditures.
While TC Energy looks to spend between CAD$5.5 billion ($4.02 billion) and CAD$6.0 billion ($4.38 billion) annually through 2030, Enbridge expects to spend considerably more. In 2026, it will deploy CAD$10 billion ($7.3 billion) in growth capital, as part of its CAD$39 billion ($28.5 billion) secured capital program.
Analysts Aren’t Sure About Either Stock
According to MarketWatch, of the 25 analysts covering Enbridge stock, nine rate it a Buy, with a median target price of $52.81, whereas 14 of 25 analysts covering TC Energy rate it a Buy, with a median target price of $60.57. You’ll notice that these targets are below where both stocks currently trade.
Based on Enbridge’s enterprise value of CAD$275.54 billion, its free cash flow yield is 1.2%. That compares to 1.3% for TC Energy and its CAD$162.35 billion ($118.52 billion) enterprise value.
While their free cash flow yields are well below 4%, the level at which I view a stock as fair value -- I consider anything above 8% to be in value territory -- there’s a reason for this: both businesses have expansive pipeline infrastructure to maintain, and that’s not cheap.
Enbridge finished 2025 with CAD$106.4 billion ($77.67 billion) in total debt according to S&P Global Market Intelligence, 6.1 times its EBITDA (earnings before interest, taxes, depreciation and amortization). Meanwhile, TC Energy’s total debt was CAD$61.02 billion ($44.54 billion), 6.3 times EBITDA.
While that’s considerable leverage, Enbridge has CAD$18 billion ($13.14 billion) in projects set to come online over the next two years, which should lead to considerably higher EBITDA and cash flow. It aims to pay out about 70% of its DCF (distributable cash flow per share) as dividends.
As I mentioned earlier, it hasn’t missed a dividend increase over the past 30 years. A big reason for the consistency is that about 98% of its revenue is cost-of-service guaranteed contracts, making it North America’s largest natural gas utility by volume. Income investors love the consistency.
What Makes One Better Than the Other?
If I could put my finger on one thing that separates the two, it would be Enbridge’s diversification. In 2025, it had three operating segments that generated over CAD$3 billion ($2.19 billion) in EBITDA -- Liquids Pipelines (49% of EBITDA), Gas Transmission (28%), and Gas Distribution and Storage (20%) -- with its Renewable Power Generation segment (3%) helping keep the cash flowing.
The other difference between the two relates to valuation.
TC Energy’s enterprise value is 10.65 times its revenues for the latest 12 months. A decade ago, the multiple was 6.35x, a 68% increase, while Enbridge’s enterprise value is 4.23 times EBITDA for the latest 12 months, about 53% higher, but still less than half TC Energy’s multiple.
Granted, TC Energy’s multiple is higher in large part because its margins are higher -- it has an EBITDA margin of 62.5%, more than double Enbridge’s at 26.8% -- but ultimately, when it comes to energy infrastructure, bigger is usually better.
While they’re both excellent dividend-paying stocks, if you can only own one, Enbridge is your best bet.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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