Enbridge (TSX:ENB) is expected to report fourth-quarter (Q4) 2024 and full-year 2024 results in early February 2025. The share price has enjoyed a nice rally in recent months, and dividend investors are wondering if ENB stock is still undervalued and good to buy heading into next year.

Enbridge stock price

Enbridge trades near $61 per share at the time of writing. The stock is close to its multi-year high and is up about 25% in 2024.

The rally kicked into gear when the Bank of Canada started to cut interest rates. The rebound received an extra boost after the U.S. Federal Reserve also began reducing interest rates in recent months. Central banks are unwinding the rate hikes they put in place in 2022 and 2023 to get inflation under control. With that goal largely achieved, the central banks are now more concerned about navigating a soft landing for the economy.

Higher rates triggered a drop in Enbridge's share price from $59 in 2022 to as low as $44 in the fall last year. Investors became concerned that the added debt expenses would cut into profits and reduce cash available for distributions. Some pundits even speculated that Enbridge might have to trim the dividend.

As soon as the central banks signalled that rate hikes were done, market sentiment shifted to expectation of rate cuts. Bargain hunters started buying Enbridge late last year. Now that rate cuts have begun, the market is less concerned about higher debt expenses.

Growth

Enbridge uses debt to fund part of its growth program. The reduction in borrowing costs will make projects and acquisitions more attractive. Enbridge completed its US$14 billion purchase of three natural gas utilities in the United States in 2024. The company is now the largest natural gas utility operator in North America. Natural gas demand, both domestic and international, is expected to rise in the coming years as new gas-fired power-generation facilities are built to provide electricity for artificial intelligence data centres.

Enbridge is working on a $27 billion capital program that will boost revenue and cash flow over the medium term. The company expects earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow by 7% to 9% through 2026. Adjusted earnings per share (EPS) are expected to grow by 4% to 6%. Distributable cash flow should grow by 3%.

Enbridge has diversified its assets in recent years. The company purchased an oil export terminal in Texas, has a stake in a new liquified natural gas (LNG) export terminal being built in British Columbia, and has expanded its renewable energy group.

Dividends

Enbridge recently announced a 3% dividend increase. This is the 30th consecutive year the board has bumped up the distribution. Investors should see ongoing dividend growth in line with the expansion of distributable cash flow. At the time of writing, ENB stock provides a dividend yield of 6.2%.

Should you buy before the Q4 results come out?

There shouldn't be any surprises when Enbridge reports its Q4 and full-year 2024 results, so income investors should be comfortable owning the stock at the current level.

Those who are focused more on total returns might decide to take a half position and look to add on any weakness. The broader market is due for a pullback, so a better entry point could be on the horizon in the coming months.