During the September 8 episode of Mad Money, Jim Cramer turned his attention to Enbridge Inc. (NYSE:ENB), examining escalating geopolitical tensions. He commented:
As long as the war with Iran drags on, it's easy to recommend the refiners like a Valero or a Marathon. I don't see it ending any time soon, not with the US and Iran trading volleys this evening at islands and ships in the Strait. But how about a pipeline that moves about 30% of all crude produced in North America? Now, I'm talking about Enbridge which has a 5.5% yield. Also has a natural gas, you know, it transports 20% of the natural gas that's consumed in America. Okay, it's Canadian, but it's not caught up in the tariff fight because slapping tariffs on Canadian energy would be economic suicide for our country.
Cramer's focus on Enbridge Inc. (NYSE:ENB) highlights the structural dominance of its midstream network. The company operates as a significant transport network for North American energy, moving approximately 30% of all crude produced on the continent. Moreover, its vast utility and transmission network handles 20% of the natural gas consumed in the United States. The company's toll-road business model generates highly predictable cash flows, supporting an attractive dividend yield of roughly 5.6%. For income-focused investors, the combination of essential operational volume and reliable capital return creates a defensive cushion during volatile market cycles.
The company's defensive moat goes into cross-border trade and regional security. As Cramer pointed out, imposing punitive tariffs on Canadian energy imports would amount to severe economic self-harm for the United States, given the deep interdependence of North American energy grids.
Even with steady toll revenues, Enbridge Inc. (NYSE:ENB) carries a heavy debt load that comes with the territory of running massive pipeline networks, with long-term debt sitting at approximately C$104 billion. Because building and maintaining energy infrastructure requires heavy borrowing, higher interest rates hit financing costs, which can occasionally weigh on income-seeking investors.
In addition, getting new projects approved is usually complicated. Pipeline expansions routinely face environmental pushback, long legal battles, and regulatory roadblocks across multiple borders that can drag out construction timelines and bloat budgets.
Institutional sentiment toward Enbridge Inc. (NYSE:ENB) shows a steady profile, with 31 hedge funds holding a stake in the company in Q2 compared to 37 in the prior quarter. Among the 1000+ hedge funds tracked by Insider Monkey, GQG Partners maintained the most prominent stake in the company despite decreasing its position by 36% to nearly 49.1 million shares. Its second largest hedge fund holder in Q2, Orbis Investment Management increased its stake in the company by 160% to 4.34 million shares. Meanwhile, the short interest of float sits at 3.20%.
Enbridge Inc. (NYSE:ENB) offers reliable cash flow backed by the backbone of North American energy logistics. While traditional refiners ride the rollercoaster of shifting fuel margins and geopolitical headlines, the pipeline giant delivers steady income and a stable, toll-road business model.
While we acknowledge the potential of ENB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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