Energy Stocks Surge as Pipeline Investments Gain Favor
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy ET?
Source: Fool
- Investor Shift to Energy Stocks: As oil prices rise, investors are significantly returning to energy stocks, particularly pipeline stocks, which exhibit lower revenue and earnings volatility compared to exploration and production companies, making them suitable for long-term investments.
- Growth Potential of Energy Transfer: Energy Transfer owns over 140,000 square miles of midstream energy infrastructure, and its 442-mile Hugh Brinson Pipeline is expected to supply natural gas to both electric utilities and AI data centers, driving future distribution growth targets of 3% to 5%.
- Stable Returns from Hess Midstream: Hess Midstream has never cut its distribution since going public, currently offering a forward distribution yield of approximately 7.9%, and has consistently increased payouts over the past nine years, targeting 5% annual distribution growth through 2028.
- Strong Distribution Growth of MPLX: MPLX boasts a 10-year track record of distribution growth, with a current forward distribution yield of 7.4%, and a 12.5% growth rate over the past year, with projections indicating continued increases of 12.5% over the next two years.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy ET?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
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: 18.750
Low
17.00
Averages
20.65
High
23.00
Current: 18.750
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 Transfer and Midstream Stocks Show Strong Distribution Growth Potential
- Energy Transfer Overview: Energy Transfer owns over 140,000 square miles of midstream energy infrastructure, with a forward distribution yield of 7.3% indicating strong growth potential; despite a temporary reduction during the pandemic, distributions have increased by approximately 3.1% over the past year.
- Hess Midstream's Capital Return: Since its IPO in 2017, Hess Midstream has never cut its distribution, currently boasting a forward yield of around 7.9%, and has consistently raised payouts over the past nine years, although management targets a 5% annual growth rate through 2028.
- MPLX's Stable Growth: MPLX has a record of 10 consecutive years of distribution growth, with a current forward yield of 7.4% and an average annual growth rate of 11.6% over the past decade, with expectations to maintain a 12.5% growth rate over the next two years, showcasing strong market appeal.
- Investment Opportunities in Midstream Stocks: As oil prices rise, investors are returning to energy stocks, with midstream stocks like pipeline stocks becoming a strong long-term investment choice due to their lower revenue volatility and stable distribution yields, especially amid rising demand for natural gas.
See More
Energy Stocks Surge as Pipeline Investments Gain Favor
- Investor Shift to Energy Stocks: As oil prices rise, investors are significantly returning to energy stocks, particularly pipeline stocks, which exhibit lower revenue and earnings volatility compared to exploration and production companies, making them suitable for long-term investments.
- Growth Potential of Energy Transfer: Energy Transfer owns over 140,000 square miles of midstream energy infrastructure, and its 442-mile Hugh Brinson Pipeline is expected to supply natural gas to both electric utilities and AI data centers, driving future distribution growth targets of 3% to 5%.
- Stable Returns from Hess Midstream: Hess Midstream has never cut its distribution since going public, currently offering a forward distribution yield of approximately 7.9%, and has consistently increased payouts over the past nine years, targeting 5% annual distribution growth through 2028.
- Strong Distribution Growth of MPLX: MPLX boasts a 10-year track record of distribution growth, with a current forward distribution yield of 7.4%, and a 12.5% growth rate over the past year, with projections indicating continued increases of 12.5% over the next two years.
See More
U.S. Stocks Weighed Down by Multiple Factors, Blue Chips Become Safe Haven
- Market Volatility Factors: Escalating conflicts in the Middle East, inflation, and unclear monetary policies have dragged down U.S. stocks over the past month, although the S&P 500 is still up 20% over the past 12 months, with a current P/E ratio of 29 indicating historical high-risk levels.
- Attraction of Blue Chips: Amid macroeconomic pressures, stable blue-chip stocks and high-dividend stocks like Energy Transfer (ET) and Digital Realty Trust (DLR) are expected to attract more investors as safe-haven investments, especially if a market crash occurs.
- Energy Transfer Overview: Energy Transfer operates over 140,000 miles of pipelines across the U.S. with a market cap of $65 billion and a current dividend yield of 7.07%; it is projected to generate $8.2 billion in adjusted DCF by 2025, easily covering its $4.6 billion in distributions.
- Digital Realty Trust Outlook: As a data center REIT, Digital Realty expects its core funds from operations to rise by 8%-10% to $7.90-$8.00 per share in 2026, with a current dividend of $4.88 per share, demonstrating its robustness in the expanding cloud and AI markets.
See More
Qatar's LNG Exports Halt for Five Days Amid Geopolitical Tensions
- LNG Export Halt: For the first time since 2008, Qatar has not exported LNG for five consecutive days due to shutdowns at the Ras Laffan LNG complex following Iranian strikes, which could significantly impact global energy supply chains.
- Focus on U.S. LNG Producers: Amid current geopolitical turmoil, Cheniere Energy (LNG) has emerged as a must-have energy stock for investors, while second-ranked Venture Global (VG) is highlighted for its ability to sell up to 4 billion cubic feet per day from its Plaquemines plant, showcasing its competitive edge in the market.
- Market Reaction: Dutch front-month gas futures rose by 6.1%, trading above €50 per megawatt, reflecting market concerns over LNG supply disruptions, which may lead to further volatility in energy prices.
- Force Majeure Declarations: Companies such as Shell (SHEL) and TotalEnergies (TTE) have declared force majeure to their customers, indicating the far-reaching implications of Qatar's LNG supply disruptions on global energy markets, potentially complicating customer relationships and contract fulfillments.
See More
High-Yield Stocks Gain Appeal Amid Market Turbulence
- Brookfield Renewable: Brookfield Renewable is expected to double its revenue from $5.1 billion to $10.7 billion by 2028, driven primarily by the rapid growth of cloud computing and AI markets, while long-term renewable power agreements with Microsoft and Google will further solidify its market position.
- Stable Dividend Yield: Brookfield Renewable offers a forward yield of 5.2%, and although it has not yet achieved consistent profitability, its adjusted EBITDA is projected to grow at an 8% CAGR from 2025 to 2028, indicating strong future earnings potential.
- Enterprise Products Partners: Enterprise Products Partners operates over 50,000 miles of pipeline across 27 states, with an expected operational distributable cash flow of $7.9 billion in 2025, easily covering its $4.8 billion in distributions, ensuring a sustainable 5.9% yield.
- Market Competitive Advantage: While Enterprise Products Partners is less aggressive in expanding its pipeline network compared to competitors, its lower debt levels and stable revenue model provide relative safety and attractiveness in turbulent market conditions.
See More
Energy Midstream Stocks Offer Stable Income
- Energy Transition Potential: Energy Transfer (ET) currently boasts a 7.1% dividend yield and plans to increase distributions by 3% to 5% moving forward, leveraging its extensive midstream operations and stable fee-based business to provide long-term passive income for investors.
- Consistent Growth Performance: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, with a current yield of 5.9%, and is projected to achieve double-digit growth in adjusted EBITDA and cash flow by 2027, demonstrating its reliability and resilience in uncertain markets.
- High Yield Appeal: Western Midstream (WES) offers an 8.6% yield, ranking among the highest in the midstream sector, and while facing some short-term challenges, it expects a 3% increase in distributions in 2026 and maintains financial stability through a restructured fixed-fee agreement with Occidental.
- Strategic Diversification: Western Midstream is actively expanding its footprint in the produced water business through acquisitions like Aris Water Solutions and the Pathfinder Pipeline project, and despite the transition period, it is still poised for adjusted EBITDA growth, enhancing its competitive position in the market.
See More
Energy Transfer and Midstream Stocks Show Strong Distribution Growth Potential
- Energy Transfer Overview: Energy Transfer owns over 140,000 square miles of midstream energy infrastructure, with a forward distribution yield of 7.3% indicating strong growth potential; despite a temporary reduction during the pandemic, distributions have increased by approximately 3.1% over the past year.
- Hess Midstream's Capital Return: Since its IPO in 2017, Hess Midstream has never cut its distribution, currently boasting a forward yield of around 7.9%, and has consistently raised payouts over the past nine years, although management targets a 5% annual growth rate through 2028.
- MPLX's Stable Growth: MPLX has a record of 10 consecutive years of distribution growth, with a current forward yield of 7.4% and an average annual growth rate of 11.6% over the past decade, with expectations to maintain a 12.5% growth rate over the next two years, showcasing strong market appeal.
- Investment Opportunities in Midstream Stocks: As oil prices rise, investors are returning to energy stocks, with midstream stocks like pipeline stocks becoming a strong long-term investment choice due to their lower revenue volatility and stable distribution yields, especially amid rising demand for natural gas.
See More
Energy Stocks Surge as Pipeline Investments Gain Favor
- Investor Shift to Energy Stocks: As oil prices rise, investors are significantly returning to energy stocks, particularly pipeline stocks, which exhibit lower revenue and earnings volatility compared to exploration and production companies, making them suitable for long-term investments.
- Growth Potential of Energy Transfer: Energy Transfer owns over 140,000 square miles of midstream energy infrastructure, and its 442-mile Hugh Brinson Pipeline is expected to supply natural gas to both electric utilities and AI data centers, driving future distribution growth targets of 3% to 5%.
- Stable Returns from Hess Midstream: Hess Midstream has never cut its distribution since going public, currently offering a forward distribution yield of approximately 7.9%, and has consistently increased payouts over the past nine years, targeting 5% annual distribution growth through 2028.
- Strong Distribution Growth of MPLX: MPLX boasts a 10-year track record of distribution growth, with a current forward distribution yield of 7.4%, and a 12.5% growth rate over the past year, with projections indicating continued increases of 12.5% over the next two years.
See More
U.S. Stocks Weighed Down by Multiple Factors, Blue Chips Become Safe Haven
- Market Volatility Factors: Escalating conflicts in the Middle East, inflation, and unclear monetary policies have dragged down U.S. stocks over the past month, although the S&P 500 is still up 20% over the past 12 months, with a current P/E ratio of 29 indicating historical high-risk levels.
- Attraction of Blue Chips: Amid macroeconomic pressures, stable blue-chip stocks and high-dividend stocks like Energy Transfer (ET) and Digital Realty Trust (DLR) are expected to attract more investors as safe-haven investments, especially if a market crash occurs.
- Energy Transfer Overview: Energy Transfer operates over 140,000 miles of pipelines across the U.S. with a market cap of $65 billion and a current dividend yield of 7.07%; it is projected to generate $8.2 billion in adjusted DCF by 2025, easily covering its $4.6 billion in distributions.
- Digital Realty Trust Outlook: As a data center REIT, Digital Realty expects its core funds from operations to rise by 8%-10% to $7.90-$8.00 per share in 2026, with a current dividend of $4.88 per share, demonstrating its robustness in the expanding cloud and AI markets.
See More
Qatar's LNG Exports Halt for Five Days Amid Geopolitical Tensions
- LNG Export Halt: For the first time since 2008, Qatar has not exported LNG for five consecutive days due to shutdowns at the Ras Laffan LNG complex following Iranian strikes, which could significantly impact global energy supply chains.
- Focus on U.S. LNG Producers: Amid current geopolitical turmoil, Cheniere Energy (LNG) has emerged as a must-have energy stock for investors, while second-ranked Venture Global (VG) is highlighted for its ability to sell up to 4 billion cubic feet per day from its Plaquemines plant, showcasing its competitive edge in the market.
- Market Reaction: Dutch front-month gas futures rose by 6.1%, trading above €50 per megawatt, reflecting market concerns over LNG supply disruptions, which may lead to further volatility in energy prices.
- Force Majeure Declarations: Companies such as Shell (SHEL) and TotalEnergies (TTE) have declared force majeure to their customers, indicating the far-reaching implications of Qatar's LNG supply disruptions on global energy markets, potentially complicating customer relationships and contract fulfillments.
See More
High-Yield Stocks Gain Appeal Amid Market Turbulence
- Brookfield Renewable: Brookfield Renewable is expected to double its revenue from $5.1 billion to $10.7 billion by 2028, driven primarily by the rapid growth of cloud computing and AI markets, while long-term renewable power agreements with Microsoft and Google will further solidify its market position.
- Stable Dividend Yield: Brookfield Renewable offers a forward yield of 5.2%, and although it has not yet achieved consistent profitability, its adjusted EBITDA is projected to grow at an 8% CAGR from 2025 to 2028, indicating strong future earnings potential.
- Enterprise Products Partners: Enterprise Products Partners operates over 50,000 miles of pipeline across 27 states, with an expected operational distributable cash flow of $7.9 billion in 2025, easily covering its $4.8 billion in distributions, ensuring a sustainable 5.9% yield.
- Market Competitive Advantage: While Enterprise Products Partners is less aggressive in expanding its pipeline network compared to competitors, its lower debt levels and stable revenue model provide relative safety and attractiveness in turbulent market conditions.
See More
Energy Midstream Stocks Offer Stable Income
- Energy Transition Potential: Energy Transfer (ET) currently boasts a 7.1% dividend yield and plans to increase distributions by 3% to 5% moving forward, leveraging its extensive midstream operations and stable fee-based business to provide long-term passive income for investors.
- Consistent Growth Performance: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, with a current yield of 5.9%, and is projected to achieve double-digit growth in adjusted EBITDA and cash flow by 2027, demonstrating its reliability and resilience in uncertain markets.
- High Yield Appeal: Western Midstream (WES) offers an 8.6% yield, ranking among the highest in the midstream sector, and while facing some short-term challenges, it expects a 3% increase in distributions in 2026 and maintains financial stability through a restructured fixed-fee agreement with Occidental.
- Strategic Diversification: Western Midstream is actively expanding its footprint in the produced water business through acquisitions like Aris Water Solutions and the Pathfinder Pipeline project, and despite the transition period, it is still poised for adjusted EBITDA growth, enhancing its competitive position in the market.
See More
