Enbridge Inc. (NYSE:ENB) reported revenue close to twice the year-earlier figure and earnings a third lower. Both halves come from the same filing, and neither says what it first appears to.
The stock closed at $48.10 on October 16. It has returned -7.9% during the last 6 months, compared to a 10.5% return for the Insider Monkey Billionaire Index and 9.3% for the State Street SPDR S&P 500 ETF Trust. The company moves more crude oil than anyone else in North America and has added gas utilities and renewable power alongside the pipelines. Very little of that changed over the quarter the headline figures describe.
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Where the Revenue Came From:
The quarterly report Enbridge filed for the period ended in June shows total operating revenues at almost double what they were twelve months before. That looks like a transformed company until you open the line beneath it.
Commodity sales account for almost the whole increase, and commodity costs rose by very nearly the same amount. Enbridge bought and sold far more physical product than it did a year ago, which inflates both sides of the income statement and leaves little behind.
The margin shows it. Just 10.16% of revenue reaches operating profit, which is not what a toll business earns. Reselling product at close to cost is what pulls an average down that far.
This is a gross-up rather than growth. Enbridge carries the largest hedge fund stake of any name in our 10 Best Pipeline and MLP Stocks to Buy According to Hedge Funds, which sits oddly against a share price that has gone nowhere. To see the full ranking, click HERE.
Where the Earnings Went:
The fall in profit has a different cause again. Other income swung from a sizeable gain a year ago to a small expense this time, and that one line more than accounts for the entire decline in earnings.
Those movements are mostly unrealised changes in the value of derivatives Enbridge holds to manage currency and interest rate risk. They are accounting entries rather than cash, and they can reverse as easily as they arrived.
Interest expense did rise 18.10%, and that part is real. Some 162.98% of equity is borrowed, unremarkable for a pipeline and still a claim on the cash before an owner sees any. A company that keeps borrowing pays more as it goes, and that cost does not reverse the way a derivative mark does.
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What the Shares Are Being Priced On:
If the quarter was not the problem, the price ought to say so, and it does. A multiple of 20.37 times what analysts expect next year and a 5.82% yield are not what difficulty looks like.
The drawdown looks less like a verdict on the quarter and more like a sector that was bought on an energy demand story and has since cooled. The reported numbers, read properly, describe a steadier company than the headline figures suggest.
A yield like this is why most people hold the shares at all. 9 Best Energy Dividend Stocks to Invest In Now has the rest of that field.
Conclusion:
Neither half of the headline means what it looks like. The revenue did not double because the business doubled; it rose because Enbridge bought and resold far more product, with costs rising almost in step. The profit did not fall because the pipelines earned less; it fell because a derivative gain in the comparison quarter did not repeat. What is left underneath is a toll road with rising interest costs. Watch the interest line, because that one is cash and it does not reverse.
Market Sentiment:
Enbridge Inc. was held by 31 hedge funds with a combined stake value of about $3.30 billion at the end of Q2 2026 in the Insider Monkey database. This is down from 37 hedge fund holders in the previous quarter.
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This article is originally published at Insider Monkey.
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