Contraryinvesting·2026-01-27 10:00Core Viewpoint - Natural gas prices are experiencing a significant increase due to a severe winter storm in the US, presenting a contrarian investment opportunity in Enbridge (ENB), whose stock price has not yet reflected this trend [1][3]. Group 1: Natural Gas Market Dynamics - The spike in natural gas prices is attributed to a "generational" winter storm, indicating sustained demand for gas in the future [3]. - The Energy Information Administration (EIA) forecasts that natural gas prices will remain relatively flat in 2026 but are expected to rise by 33% in 2027 due to increased LNG exports and higher power consumption in the US [4]. - Data centers are a significant contributor to the rising power usage, impacting overall energy demand [7]. Group 2: Enbridge's Position and Strategy - Enbridge operates a pipeline network that transports 20% of the natural gas consumed in the US and 30% of North American crude oil production, positioning it well within the energy sector [9]. - The company benefits from increased demand for natural gas, acting as a "tollbooth" by collecting fees for the transportation of oil and gas [10]. - Enbridge is expanding its renewable energy portfolio, with over seven gigawatts of renewable projects either operational or under construction, which aligns with long-term energy trends [12]. Group 3: Oil Market Considerations - Enbridge is expanding its Mainline system to increase crude oil capacity, with plans to add 150,000 barrels per day by 2027 and an additional 250,000 barrels by 2030 [14]. - Concerns about Venezuelan oil displacing Canadian crude are unfounded, as Venezuela's oil infrastructure is in decline, making it unlikely to compete with Canadian heavy crude in the near future [15][17]. Group 4: Dividend and Investment Appeal - Enbridge has announced its 31st consecutive dividend increase, indicating strong financial health and a commitment to returning value to shareholders [18]. - The share price of Enbridge is currently lagging behind its dividend growth, suggesting it may be undervalued and presenting a buying opportunity [20]. - The dividends are paid in Canadian dollars, which could translate into higher returns for US investors as the US dollar weakens [21].