Investment Opportunities in Energy Midstream Sector
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 14 2026
0mins
Source: Fool
- Attractive Energy Transfer: Energy Transfer (ET) offers a 7.1% dividend yield with a distribution coverage ratio of nearly 1.8 times last quarter, indicating strong cash flow and growth potential, with expected annual distribution growth of 3% to 5% moving forward.
- Stability of Enterprise Products Partners: Enterprise Products Partners (EPD) has raised its distribution for 27 consecutive years, currently yielding 5.9%, and is projected to see double-digit growth in adjusted EBITDA and cash flow by 2027, showcasing resilience amid market fluctuations.
- Genesis Energy's Transformation: Genesis Energy (GEL) has significantly reduced interest expenses by selling its volatile soda ash operations and replacing high-interest debt, projecting EBITDA growth of 15% to 20% in 2026, indicating strong growth potential.
- High Leverage with Growth Potential: Despite a leverage ratio of 5.12 times, Genesis Energy has no major capex this year and a distribution coverage ratio of 2.8 times last quarter, demonstrating its ability to reduce leverage in the coming years while raising its quarterly distribution by 9%, reflecting confidence in its business.
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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: 18.860
Low
17.00
Averages
20.65
High
23.00
Current: 18.860
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 Thrive Amid AI Data Center Demand
- Surging Energy Demand: According to Goldman Sachs, energy demand from data centers is projected to increase by 50% by 2027 and by 165% by 2030 compared to 2023, providing a significant revenue catalyst for energy companies.
- Strategic Partnership for Entergy: Entergy's subsidiary has secured a deal with Meta, which will invest in seven natural gas power plants and related infrastructure for its $27 billion data center, highlighting the focus on future energy needs.
- Natural Gas Market Share: The International Energy Agency reports that natural gas accounts for 26% of data center electricity demand, with coal and natural gas expected to meet 40% of additional electricity needs by 2030, further solidifying the market position of gas companies.
- Infrastructure Investment Opportunities: GE Vernova supports natural gas plants with turbines, having received an order for 29 turbine units from Crusoe to meet data center demands, indicating ongoing investment potential in energy infrastructure.
See More
Energy Companies Benefit from Data Center Expansion
- Surge in Data Center Demand: According to Goldman Sachs, energy demand from data centers is projected to increase by 50% by 2027 and by 165% by 2030 compared to 2023, providing significant revenue catalysts for energy companies.
- Entergy's New Partnership: Entergy Louisiana has secured a deal with Meta Platforms to support its $27 billion data center with seven new natural gas power plants and battery storage infrastructure, which is expected to further boost Entergy's stock price.
- Natural Gas Market Opportunities: The International Energy Agency reports that natural gas accounts for 26% of data center electricity demand, with coal and natural gas projected to meet 40% of the additional electricity demand from data centers by 2030, creating long-term growth potential for related companies.
- Infrastructure Support: GE Vernova supports natural gas plants with turbines and recently announced that Crusoe ordered 29 gas turbine units to meet its data center needs, indicating ongoing investment potential in energy infrastructure.
See More
Enbridge: Steady Cash Flow and High Credit Rating
- Stable Income Source: Over 98% of Enbridge's earnings come from regulated or take-or-pay contracts, resulting in highly predictable earnings that have met annual financial guidance for 20 consecutive years, showcasing its robust position in the energy infrastructure sector.
- Enhanced Financial Flexibility: Enbridge can borrow approximately CAD 5 billion (USD 3.6 billion) annually for expansion projects and acquisitions, boosting its total investment capacity to over CAD 10 billion (USD 7.3 billion) per year when including post-dividend free cash flow, providing ample funding for future growth.
- Consistent Dividend Growth: Enbridge has increased its dividend for 31 consecutive years, reflecting its low-risk business model and strong financial health, whereas Energy Transfer cut its distribution in half in 2020 due to the pandemic, indicating a higher risk profile.
- Market Leadership: As North America's energy infrastructure leader, Enbridge transports 30% of the continent's oil and 20% of the gas consumed in the U.S., and its leading position in renewable energy investments further enhances its competitive edge and long-term growth potential.
See More
Enbridge Outshines Energy Transfer as a Safer Investment
- Stable Income Source: Enbridge leads North America's energy infrastructure, transporting 30% of oil and 20% of gas, with over 98% of its earnings derived from regulated or take-or-pay contracts, ensuring income stability and predictability.
- Financial Comparison: While Energy Transfer is in its strongest financial position historically, its leverage ratio remains within the 4.0-4.5x target range, whereas Enbridge's is 4.5-5.0x, yet Enbridge boasts a higher credit rating, indicating greater financial flexibility.
- Enhanced Investment Capacity: Enbridge can borrow about CA$5 billion ($3.6 billion) annually for expansion projects, boosting its total investment capacity to over CA$10 billion ($7.3 billion) when including post-dividend free cash flow, compared to Energy Transfer's planned $5 billion to $5.5 billion investment.
- Dividend Reliability: Enbridge has increased its dividend for 31 consecutive years, reflecting its low-risk business model and strong financial position, while Energy Transfer cut its distribution in half in 2020, indicating a higher overall risk profile despite recent improvements.
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
Energy Stocks Thrive Amid AI Data Center Demand
- Surging Energy Demand: According to Goldman Sachs, energy demand from data centers is projected to increase by 50% by 2027 and by 165% by 2030 compared to 2023, providing a significant revenue catalyst for energy companies.
- Strategic Partnership for Entergy: Entergy's subsidiary has secured a deal with Meta, which will invest in seven natural gas power plants and related infrastructure for its $27 billion data center, highlighting the focus on future energy needs.
- Natural Gas Market Share: The International Energy Agency reports that natural gas accounts for 26% of data center electricity demand, with coal and natural gas expected to meet 40% of additional electricity needs by 2030, further solidifying the market position of gas companies.
- Infrastructure Investment Opportunities: GE Vernova supports natural gas plants with turbines, having received an order for 29 turbine units from Crusoe to meet data center demands, indicating ongoing investment potential in energy infrastructure.
See More
Energy Companies Benefit from Data Center Expansion
- Surge in Data Center Demand: According to Goldman Sachs, energy demand from data centers is projected to increase by 50% by 2027 and by 165% by 2030 compared to 2023, providing significant revenue catalysts for energy companies.
- Entergy's New Partnership: Entergy Louisiana has secured a deal with Meta Platforms to support its $27 billion data center with seven new natural gas power plants and battery storage infrastructure, which is expected to further boost Entergy's stock price.
- Natural Gas Market Opportunities: The International Energy Agency reports that natural gas accounts for 26% of data center electricity demand, with coal and natural gas projected to meet 40% of the additional electricity demand from data centers by 2030, creating long-term growth potential for related companies.
- Infrastructure Support: GE Vernova supports natural gas plants with turbines and recently announced that Crusoe ordered 29 gas turbine units to meet its data center needs, indicating ongoing investment potential in energy infrastructure.
See More
Enbridge: Steady Cash Flow and High Credit Rating
- Stable Income Source: Over 98% of Enbridge's earnings come from regulated or take-or-pay contracts, resulting in highly predictable earnings that have met annual financial guidance for 20 consecutive years, showcasing its robust position in the energy infrastructure sector.
- Enhanced Financial Flexibility: Enbridge can borrow approximately CAD 5 billion (USD 3.6 billion) annually for expansion projects and acquisitions, boosting its total investment capacity to over CAD 10 billion (USD 7.3 billion) per year when including post-dividend free cash flow, providing ample funding for future growth.
- Consistent Dividend Growth: Enbridge has increased its dividend for 31 consecutive years, reflecting its low-risk business model and strong financial health, whereas Energy Transfer cut its distribution in half in 2020 due to the pandemic, indicating a higher risk profile.
- Market Leadership: As North America's energy infrastructure leader, Enbridge transports 30% of the continent's oil and 20% of the gas consumed in the U.S., and its leading position in renewable energy investments further enhances its competitive edge and long-term growth potential.
See More
Enbridge Outshines Energy Transfer as a Safer Investment
- Stable Income Source: Enbridge leads North America's energy infrastructure, transporting 30% of oil and 20% of gas, with over 98% of its earnings derived from regulated or take-or-pay contracts, ensuring income stability and predictability.
- Financial Comparison: While Energy Transfer is in its strongest financial position historically, its leverage ratio remains within the 4.0-4.5x target range, whereas Enbridge's is 4.5-5.0x, yet Enbridge boasts a higher credit rating, indicating greater financial flexibility.
- Enhanced Investment Capacity: Enbridge can borrow about CA$5 billion ($3.6 billion) annually for expansion projects, boosting its total investment capacity to over CA$10 billion ($7.3 billion) when including post-dividend free cash flow, compared to Energy Transfer's planned $5 billion to $5.5 billion investment.
- Dividend Reliability: Enbridge has increased its dividend for 31 consecutive years, reflecting its low-risk business model and strong financial position, while Energy Transfer cut its distribution in half in 2020, indicating a higher overall risk profile despite recent improvements.
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
