Energy Transfer's Stable Income Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 10 2026
0mins
Should l Buy ET?
Source: NASDAQ.COM
- Stable Revenue Model: Energy Transfer generates most of its profits by charging upstream and downstream companies 'tolls' for using its infrastructure, making its revenue model relatively insulated from volatile oil and gas prices, ensuring stable cash flow and distributions.
- Tax Efficiency Advantage: As a master limited partnership (MLP), Energy Transfer can pass tax losses onto investors, thereby reducing the tax burden on cash distributions and enhancing overall investor returns.
- Distribution Coverage Capability: Data shows that Energy Transfer's distributable cash flow (DCF) has consistently covered its annual distributions over the past five years, with an adjusted DCF of $7.58 billion in 2023, indicating the sustainability of its distributions.
- Future Earnings Expectations: Analysts expect Energy Transfer's earnings per unit (EPU) to rise from a loss of $0.24 in 2020 to $1.71 by 2028, with the current stock price of $19 still valued at less than 13 times this year's EPU, highlighting its investment attractiveness.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 18.870
Low
17.00
Averages
20.65
High
23.00
Current: 18.870
Low
17.00
Averages
20.65
High
23.00
About ET
Energy Transfer LP owns and operates a diversified portfolios of energy assets in the United States, with more than 140,000 miles of pipeline and associated energy infrastructure. The Company’s strategic network spans 44 states with assets in all of the major United States production basins. Its core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The Company’s segments include intrastate transportation and storage, interstate transportation and storage, midstream, NGL and refined products transportation and services, crude oil transportation and services, investment in Sunoco LP, investment in USA Compression Partners, LP (USAC), and all other. It also owns Lake Charles LNG Company, LLC, its wholly owned subsidiary, which owns an LNG import terminal and regasification facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Energy Stocks Benefit from Soaring Oil Prices
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- Chevron's Cash Flow Growth: Chevron anticipates generating an additional $12.5 billion in free cash flow this year at $70 oil, with expectations for this figure to rise significantly due to current prices, which will further enhance its stock buyback plan, targeting between $10 billion and $20 billion.
- Energy Transfer's Growth Potential: Energy Transfer plays a crucial role in oil and gas flow, benefiting from the U.S. Strategic Petroleum Reserve's release, which is expected to boost earnings as oil flows out and reserves are replenished, with plans to invest at least $5 billion in growth projects over the coming years.
- Williams Companies' Long-Term Growth: Williams is a leader in natural gas infrastructure, with U.S. gas demand projected to increase over 35% in the next decade, and the company has approved over $7 billion in gas-fired power solutions, positioning it for more than 10% annual earnings growth through 2030.
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Energy Stocks Benefit from Soaring Oil Prices
- Surging Oil Prices: Crude oil prices have skyrocketed due to the war with Iran, with Brent rising over 60% to around $100 per barrel and WTI up 65%, creating significant profit opportunities for companies like Chevron.
- Chevron's Cash Flow Growth: Chevron anticipates generating an additional $12.5 billion in free cash flow this year at $70 oil, and with current prices, this figure could be even higher, enhancing its capacity for shareholder returns.
- Energy Transfer Investments: Energy Transfer plans to invest at least $5 billion in growth capital projects in 2023, supporting its high 7.1% distribution yield and projecting annual growth of 3% to 5%, ensuring stable long-term earnings growth.
- Rising Natural Gas Demand: Williams expects U.S. natural gas demand to increase by over 35% over the next decade, having approved over $7 billion in gas-fired power solutions, which is projected to drive its annual earnings growth above 10%.
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- MPLX Growth Potential: MPLX (MPLX) features a 7.8% yield and 11x forward EV/EBITDA, having increased its distribution by 12.5% over the past two years and planning similar growth ahead, indicating robust growth projects in the Permian and Gulf Coast regions.
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- Growing Market Demand: According to the International Energy Agency, natural gas is the third-largest source of electricity for data centers globally, with the market projected to reach $902 billion by 2033, positioning Energy Transfer to benefit significantly.
- Key Partnership Agreements: The company has secured a major agreement with Oracle to supply natural gas for three of its data centers, along with a 20-year deal with Entergy Louisiana to support Meta Platforms' AI data center, further solidifying its market position.
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- ExxonMobil's Growth Outlook: As the world's second-largest energy company, ExxonMobil expects to increase its earnings by $25 billion by 2030 and generate an additional $35 billion in free cash flow, showcasing its strong market position and financial health, which appeals to income investors.
- Energy Transfer's Rising Demand: While Energy Transfer's revenue isn't directly driven by oil and gas prices, the disruption in Middle Eastern supply has increased demand for U.S. oil and gas, with the company operating over 140,000 miles of pipeline and transporting 32 million BTUs of natural gas and 7 million barrels of crude oil daily, expecting long-term distribution growth of 3% to 5%.
- Investor Focus: Amid the uncertainty in the Middle East, Wall Street analysts are increasingly focused on energy stocks like Chevron, ExxonMobil, and Energy Transfer, although the Motley Fool analyst team suggests there are 10 other stocks with greater investment potential, urging investors to choose wisely.
See More
Impact of Iran War on Global Energy Markets
- Oil Supply Risks: The U.S. and Israel's attacks on Iran have disrupted traffic through the Strait of Hormuz, causing turmoil in global energy markets, prompting investors to monitor oil price fluctuations and their impact on energy stocks.
- Chevron's Stability: Chevron (CVX) stands out due to its strong operations in the Permian Basin, with expectations of over 10% annual growth in earnings per share and free cash flow, alongside a 39-year streak of dividend increases, reflecting its financial robustness amid Middle East oil supply risks.
- ExxonMobil's Growth Potential: As the world's second-largest energy company, ExxonMobil (XOM) anticipates a $25 billion increase in earnings by 2030 and an additional $35 billion in free cash flow, with a 43-year history of dividend growth attracting income investors.
- Energy Transfer's Market Demand: Energy Transfer (ET) benefits from rising U.S. oil and gas demand due to Middle Eastern supply disruptions, with its extensive pipeline network positioning it favorably in the market, and management expects a long-term distribution growth rate of 3% to 5%.
See More
Energy Stocks Benefit from Soaring Oil Prices
- Surge in Oil Prices: The ongoing conflict with Iran has led to a more than 60% increase in Brent crude prices, reaching around $100 per barrel, while WTI prices have surged 65% to about $95, creating significant profit opportunities for energy companies amidst sustained high prices.
- Chevron's Cash Flow Growth: Chevron anticipates generating an additional $12.5 billion in free cash flow this year at $70 oil, with expectations for this figure to rise significantly due to current prices, which will further enhance its stock buyback plan, targeting between $10 billion and $20 billion.
- Energy Transfer's Growth Potential: Energy Transfer plays a crucial role in oil and gas flow, benefiting from the U.S. Strategic Petroleum Reserve's release, which is expected to boost earnings as oil flows out and reserves are replenished, with plans to invest at least $5 billion in growth projects over the coming years.
- Williams Companies' Long-Term Growth: Williams is a leader in natural gas infrastructure, with U.S. gas demand projected to increase over 35% in the next decade, and the company has approved over $7 billion in gas-fired power solutions, positioning it for more than 10% annual earnings growth through 2030.
See More
Energy Stocks Benefit from Soaring Oil Prices
- Surging Oil Prices: Crude oil prices have skyrocketed due to the war with Iran, with Brent rising over 60% to around $100 per barrel and WTI up 65%, creating significant profit opportunities for companies like Chevron.
- Chevron's Cash Flow Growth: Chevron anticipates generating an additional $12.5 billion in free cash flow this year at $70 oil, and with current prices, this figure could be even higher, enhancing its capacity for shareholder returns.
- Energy Transfer Investments: Energy Transfer plans to invest at least $5 billion in growth capital projects in 2023, supporting its high 7.1% distribution yield and projecting annual growth of 3% to 5%, ensuring stable long-term earnings growth.
- Rising Natural Gas Demand: Williams expects U.S. natural gas demand to increase by over 35% over the next decade, having approved over $7 billion in gas-fired power solutions, which is projected to drive its annual earnings growth above 10%.
See More
Midstream Energy Stocks: Best Picks for Steady Income
- Energy Transfer Outlook: Energy Transfer (ET) offers a 7.2% yield and 8.5x forward EV/EBITDA, leveraging its strong presence in the Permian Basin to target mid-teens returns, thereby solidifying its competitive edge in the midstream energy sector.
- Enterprise Products Stability: Enterprise Products Partners (EPD) boasts a 5.9% yield and 11x forward EV/EBITDA, having raised its distribution for 27 consecutive years, showcasing its reputation as a shareholder-friendly company, with projected strong double-digit cash flow and EBITDA growth for 2027.
- MPLX Growth Potential: MPLX (MPLX) features a 7.8% yield and 11x forward EV/EBITDA, having increased its distribution by 12.5% over the past two years and planning similar growth ahead, indicating robust growth projects in the Permian and Gulf Coast regions.
- Western Midstream High Yield: Western Midstream (WES) presents a 9% yield and 9.3x forward EV/EBITDA, targeting a 3% distribution increase this year, while enhancing its ties to oil production through acquisitions, demonstrating strong market adaptability amid fluctuating oil prices.
See More
Energy Transfer Starts 2026 Strong with 13% Share Increase
- Share Price Surge: Energy Transfer's shares have risen by 13%, currently trading at $18.82, reflecting strong market confidence in its growth potential and likely attracting more investor interest.
- Growing Market Demand: According to the International Energy Agency, natural gas is the third-largest source of electricity for data centers globally, with the market projected to reach $902 billion by 2033, positioning Energy Transfer to benefit significantly.
- Key Partnership Agreements: The company has secured a major agreement with Oracle to supply natural gas for three of its data centers, along with a 20-year deal with Entergy Louisiana to support Meta Platforms' AI data center, further solidifying its market position.
- Future Outlook: The Q1 2026 earnings report is expected on May 5, and the market will closely monitor project developments; if Energy Transfer can maintain growth momentum, its stock price may exceed $20, enticing more investors to enter.
See More
Middle East Turmoil Boosts Energy Stocks
- Chevron's Strong Position: Chevron is benefiting significantly from the risks associated with Middle Eastern oil supplies, with its robust operations in the Permian Basin making it a top choice among Wall Street analysts, especially as its low-cost production ensures funding for dividends and capital expenditures even if oil prices fall to around $50 per barrel.
- ExxonMobil's Growth Outlook: As the world's second-largest energy company, ExxonMobil expects to increase its earnings by $25 billion by 2030 and generate an additional $35 billion in free cash flow, showcasing its strong market position and financial health, which appeals to income investors.
- Energy Transfer's Rising Demand: While Energy Transfer's revenue isn't directly driven by oil and gas prices, the disruption in Middle Eastern supply has increased demand for U.S. oil and gas, with the company operating over 140,000 miles of pipeline and transporting 32 million BTUs of natural gas and 7 million barrels of crude oil daily, expecting long-term distribution growth of 3% to 5%.
- Investor Focus: Amid the uncertainty in the Middle East, Wall Street analysts are increasingly focused on energy stocks like Chevron, ExxonMobil, and Energy Transfer, although the Motley Fool analyst team suggests there are 10 other stocks with greater investment potential, urging investors to choose wisely.
See More
Impact of Iran War on Global Energy Markets
- Oil Supply Risks: The U.S. and Israel's attacks on Iran have disrupted traffic through the Strait of Hormuz, causing turmoil in global energy markets, prompting investors to monitor oil price fluctuations and their impact on energy stocks.
- Chevron's Stability: Chevron (CVX) stands out due to its strong operations in the Permian Basin, with expectations of over 10% annual growth in earnings per share and free cash flow, alongside a 39-year streak of dividend increases, reflecting its financial robustness amid Middle East oil supply risks.
- ExxonMobil's Growth Potential: As the world's second-largest energy company, ExxonMobil (XOM) anticipates a $25 billion increase in earnings by 2030 and an additional $35 billion in free cash flow, with a 43-year history of dividend growth attracting income investors.
- Energy Transfer's Market Demand: Energy Transfer (ET) benefits from rising U.S. oil and gas demand due to Middle Eastern supply disruptions, with its extensive pipeline network positioning it favorably in the market, and management expects a long-term distribution growth rate of 3% to 5%.
See More
