A 6.5% dividend yield can look like an oasis in a market that often makes income investors search for every last drop of cash flow. But for Enbridge, that yield arrives with a balance-sheet asterisk: net debt to EBITDA stands at 5.1x, above the company’s stated target range of 4.5x to 5.0x.

That single turn of leverage does not settle the dividend question. It does, however, make Enbridge’s income proposition less about headline yield and more about endurance. With additional debt reportedly being taken on and legal and legislative pressure surrounding the Line 5 pipeline in Michigan, the company’s 6.5% yield faces a test from both the balance sheet and the courtroom.

The central tension is familiar to dividend investors. A high yield can signal attractive valuation—or it can indicate that the market is demanding compensation for uncertainty. The source analysis describes Enbridge’s yield as attractive and even “dirt cheap” on valuation grounds. That framing makes the stock’s income appeal clear. Yet valuation is only one side of the ledger. The other is whether leverage leaves enough flexibility when financing conditions become less forgiving.

Leverage is the first warning light

Enbridge’s 5.1x net debt-to-EBITDA figure is not dramatically beyond management’s stated range, but it is beyond the range nonetheless. That distinction matters. A company’s target is a financial boundary it has publicly identified; moving above it creates a monitoring point for investors assessing sustainability.

The pressure becomes more pronounced because Enbridge is reportedly taking on additional debt. Without a broader set of figures, it would be premature to draw a conclusion about the dividend. But the direction of travel matters: leverage above the 4.5x-to-5.0x target, combined with further borrowing, could reduce room for error if interest rates rise further.

Higher rates can make debt more expensive to refinance or carry. For a dividend-focused portfolio, that may sharpen the trade-off between current income and financial flexibility. The 6.5% yield is visible immediately; the cost of elevated leverage tends to emerge more gradually, through financing decisions and the company’s ability to manage competing demands.

Line 5 adds a second layer of uncertainty

The Line 5 dispute in Michigan gives the balance-sheet discussion a regulatory and legal dimension. Enbridge is facing legislative and legal issues connected to the pipeline, creating uncertainty that is difficult to reduce to a single financial ratio.

For TSX-focused investors, the dispute is a reminder that a Canadian-listed income story can still carry meaningful cross-border exposure. For cross-border income portfolios, it adds another variable to monitor alongside leverage. Legislative and legal developments may affect how investors view the durability of the company’s cash-generating profile, even when the dividend yield remains unchanged.

The question is not whether 6.5% looks appealing. It plainly does. The harder question is how much balance-sheet and regulatory uncertainty that yield is meant to absorb.

What dividend investors should watch

The most important signals are already on the table: net debt to EBITDA at 5.1x, a stated target range of 4.5x to 5.0x, additional debt, and the continuing Line 5 legislative and legal exposure in Michigan. Together, they create a sustainability review rather than a simple yield comparison.

Enbridge’s current yield may continue to look attractive on valuation grounds, as the cited analysis argues. But the margin of comfort could depend on whether leverage moves back toward management’s target range and whether the Line 5 dispute becomes less uncertain. Until those questions become clearer, the company’s high yield carries a more complicated story than the percentage alone suggests.

Source analysis: Enbridge’s 6.5% yield and leverage risks