Energy Transfer Expands Pipeline Projects with $5.5 Billion Capex by 2026
Written by Emily J. Thompson, Senior Investment Analyst
Source: NASDAQ.COM
- Stock Performance: Energy Transfer's stock has rallied 6.4% over the past month, outperforming the Zacks Oil and Gas industry growth of 4.1%, indicating its relative strength in the market.
- Pipeline Expansion Plans: The company plans to invest $5.0 to $5.5 billion by 2026 to expand its 140,000-mile pipeline network, aiming to meet the rising natural gas demand and enhance its competitive position.
- Revenue Model Advantage: Nearly 90% of the firm's earnings come from fee-based contracts, effectively reducing exposure to commodity price fluctuations and allowing stable earnings during market volatility.
- Cash Distribution Growth: Energy Transfer's current quarterly cash distribution rate is 33.25 cents per unit, raised 16 times in the past five years, with a current yield of 7.7%, surpassing the industry average yield of 6.08%.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ET is 20.65 USD with a low forecast of 17.00 USD and a high forecast of 23.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 18.240
Low
17.00
Averages
20.65
High
23.00
Current: 18.240
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 Declares Quarterly Dividend Increase
- Quarterly Dividend Increase: Energy Transfer has declared a quarterly dividend of $0.3350 per share, reflecting a 0.8% increase from the previous $0.3325, demonstrating the company's ongoing commitment to stable cash flow and shareholder returns.
- Attractive Yield: The forward yield of 7.47% not only provides investors with substantial cash returns but also has the potential to attract more income-seeking investors to the company's stock, enhancing its market appeal.
- Dividend Payment Schedule: The dividend is payable on February 19, with a record date of February 6 and an ex-dividend date also set for February 6, ensuring shareholders receive their earnings promptly and bolstering market interest in the stock.
- Bond Offering Support: Energy Transfer is also pricing a $3 billion bond offering, which not only supports the company's capital structure but also provides funding for future investments and dividend payments, reinforcing its financial stability.
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Cushing Asset Management Increases Stake in Kinetik Holdings
- Share Increase: Cushing Asset Management significantly increased its stake in Kinetik Holdings by purchasing 855,000 shares, bringing its total holdings to 1.8 million shares, reflecting confidence in the company's future performance.
- AUM Impact: This acquisition raises Kinetik Holdings' representation to 3.8% of Cushing's assets under management, indicating its significant position within the fund's investment portfolio.
- Price Volatility: Despite Kinetik's stock price declining by 35.5% over the past year, the company recently raised its quarterly dividend by 4% to $0.81, demonstrating a positive cash flow performance even in challenging conditions.
- Market Comparison: Kinetik's 8.1% dividend yield is substantially higher than the S&P 500's 1.1%, which may attract more investors seeking stable income from the stock.
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