Midstream of Consciousness 06/21/26

Research evidence excerpt

Midstream of Consciousness 06/21/26

JuneJune21,21,20262026

Exhibit 2: Wolfe Canadian midstream coverage vs. U.S. midstream, U.S. utilities, and Canadian utilities

(total return)

Source: Wolfe Research, FactSet. Reflects total return. Canada midstream basket: SOBO, ENB, TRP. Canada Utilities basket in C$: H, EMA, FTS. As of

6/18/2026.

Canadian stock valuations and yields are at multi-year highs…with a less clear growth uplift

Each of the three Canadian midstream stocks in our coverage is now trading at around a 2.0 turn premium to

their multi-year average Cal 1 EV/EBITDA multiple using Wolfe estimates over time (see Ex. 3). While the

entire midstream sector has similarly re-rated higher, we see less of a structural change to the growth

outlook for the Canadian stocks…in part because their over-levered balance sheets and high dividend

payout ratios act as a growth limiter. On the other hand, our growth expectations for our U.S. coverage are

now much higher, which better justifies the valuation re-rating in our view.

For example, TRP’s capital plan and growth outlook through 2030 is largely unchanged. ENB continues to

target 5% growth over the long term and SOBO doesn’t have any active growth projects. Much of the valuation

re-rating in our view appears driven by an improving political environment toward production growth and

energy infrastructure in Canada, and for SOBO specifically, hopes of sanctioning the Prairie Connector where

we still see significant execution risk. Lastly, we note that peer U.S. utilities have seen a meaningful increase in

forward growth expectations, yet their valuation multiples remain consistent with recent history.

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