Natural Gas Demand Fuels Pipeline Stock Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: Fool
- Energy Transition Opportunity: With surging global electricity demand, natural gas demand continues to rise, prompting Energy Transfer to invest at least $5 billion in expansion projects by 2026, which is expected to drive earnings growth of about 10% and support annual dividend increases of 3% to 5%.
- Infrastructure Project Progress: Energy Transfer is constructing multiple natural gas infrastructure projects, including the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Transwestern Pipeline expansion, both expected to enter commercial service by 2030, providing strong growth visibility.
- Kinder Morgan's Market Leadership: As the operator of the largest natural gas infrastructure network in the U.S., Kinder Morgan transports 40% of the nation's natural gas and has secured $10 billion in expansion projects, further enhancing its growth outlook while expecting mid-single-digit earnings growth this year.
- High Dividend Yield Potential: The surge in natural gas demand will drive new pipeline projects for Energy Transfer and Kinder Morgan, enabling them to grow future cash flows and continue increasing their high-yield dividends, potentially turning a $150 investment into a growing income stream and larger future returns.
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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: 18.690
Low
17.00
Averages
20.65
High
23.00
Current: 18.690
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.
Natural Gas Demand Fuels Pipeline Stock Growth
- Energy Transition Opportunity: With surging global electricity demand, natural gas demand continues to rise, prompting Energy Transfer to invest at least $5 billion in expansion projects by 2026, which is expected to drive earnings growth of about 10% and support annual dividend increases of 3% to 5%.
- Infrastructure Project Progress: Energy Transfer is constructing multiple natural gas infrastructure projects, including the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Transwestern Pipeline expansion, both expected to enter commercial service by 2030, providing strong growth visibility.
- Kinder Morgan's Market Leadership: As the operator of the largest natural gas infrastructure network in the U.S., Kinder Morgan transports 40% of the nation's natural gas and has secured $10 billion in expansion projects, further enhancing its growth outlook while expecting mid-single-digit earnings growth this year.
- High Dividend Yield Potential: The surge in natural gas demand will drive new pipeline projects for Energy Transfer and Kinder Morgan, enabling them to grow future cash flows and continue increasing their high-yield dividends, potentially turning a $150 investment into a growing income stream and larger future returns.
See More
Three Stocks to Buy and Hold for the Long Term
- Energy Transition Leader: Energy Transfer LP reported an 8% increase in adjusted EBITDA for Q4 2025, with distributable cash flow reaching $2.04 billion, indicating strong long-term investment appeal despite a slight dip in net income, supported by a 7% dividend yield and consistent distribution growth.
- Uranium Mining Leader: Cameco's revenue rose 11% year-over-year in 2025, with basic earnings per share soaring 237%, and a net margin of 16.9%, capturing 15% of the global uranium supply, benefiting from rising nuclear energy demand and showcasing robust growth potential.
- AI Powerhouse: Palantir's total revenue surged 56% to $4.48 billion in 2025, with U.S. revenue up 75%, and adjusted free cash flow hitting $2.27 billion, reflecting its strong growth and market leadership in the AI sector.
- Financial Resilience: Palantir holds $7.2 billion in cash and short-term U.S. Treasury securities against only $230 million in debt, demonstrating exceptional financial flexibility and risk mitigation, providing a solid foundation for future expansion.
See More
Investors Should Avoid High-Risk Investments
- Investment Strategy Shift: Amid rising oil prices, investors should focus on stable income sources like Enterprise Products Partners (EPD) with a 6.1% distribution yield, avoiding high-risk three-point investment strategies to ensure long-term financial security.
- Infrastructure Investment Opportunities: EPD boasts over 50,000 miles of pipelines and more than 300 million barrels of liquid storage capacity, maintaining stable cash flow and distribution growth despite oil price fluctuations, demonstrating its resilience in the energy market.
- Energy Transition Trends: Energy Transfer (ET) is expanding in AI and energy infrastructure, signing long-term agreements with multiple states' utility companies and data centers, indicating its strategic position in future energy demand growth with a 7.1% distribution yield.
- Emerging Market Potential: Mach Natural Resources (MNR), as a young MLP, has shown lackluster performance post-IPO, yet its 4.2x valuation is significantly below the industry average, highlighting potential growth opportunities in the Anadarko Basin with a distribution yield of 14.8%.
See More
Sunoco LP Completes $1.2 Billion Bond Offering
- Upsized Bond Offering: Sunoco LP announced the pricing of its private offering of 5.375% senior notes due 2031 and 5.625% senior notes due 2034 at 100%, raising a total of $600 million, which reflects strong market demand as the offering was increased from an initial size of $500 million.
- Clear Use of Proceeds: The net proceeds from this offering will be used to fully redeem NuStar Logistics' 6.000% senior notes due 2026 and Sunoco's own 6.000% senior notes due 2027, which is expected to significantly reduce the company's debt burden and optimize its capital structure.
- Compliance and Market Positioning: The notes have not been registered under the Securities Act and are being offered only to qualified institutional buyers, indicating Sunoco's proactive approach to seeking compliant financing channels to support its business expansion.
- Infrastructure Advantage: With over 14,000 miles of pipeline and 160 terminals across North America and Europe, Sunoco LP distributes over 15 billion gallons of fuel annually, providing a robust operational foundation that supports its debt financing and enhances its competitive position in the market.
See More
Sunoco Plans $1 Billion Senior Notes Offering
- Financing Plan: Sunoco announced its intention to issue $1 billion in senior notes through a private placement, consisting of $500 million due in 2031 and $500 million due in 2034, aimed at optimizing its capital structure and reducing financing costs.
- Debt Redemption: The net proceeds from this offering will be used to fully redeem NuStar Logistics' 6.000% senior notes due 2026 and its own 6.000% senior notes due 2027, thereby alleviating future interest burdens and improving financial flexibility.
- Credit Facility Utilization: Before redeeming the 2027 notes, Sunoco may use the proceeds to repay outstanding borrowings under its revolving credit facility, which will further enhance the company's liquidity and financial stability.
- Regulatory Compliance: The notes have not been registered under the U.S. Securities Act of 1933 and will be offered only to qualified institutional buyers and non-U.S. persons, ensuring compliance with relevant regulations and attracting suitable investors.
See More
Analysis of Energy Transfer's Dividend Growth
- Stable Dividend Growth: Energy Transfer has consistently increased its dividend every quarter from 2022 to 2025, demonstrating strong dividend growth capabilities with a coverage ratio of 1.8x, attracting numerous income-focused investors.
- Ambitious Investment Plans: The company plans to invest billions in capital over the coming years, expecting annual dividend growth of 3% to 5%, which, combined with a 7% yield, could provide investors with approximately 10% long-term returns.
- Historical Risk Warning: Despite the current positive dividend growth, the company cut its dividend in half during the energy downturn of 2020 due to the pandemic, which may affect investor confidence due to this historical precedent.
- Competitor Analysis: Compared to other midstream companies, Energy Transfer's dividend track record is less impressive than that of Enterprise Products Partners (EPD), which has achieved 27 consecutive annual increases and maintains a 6% yield, making it a more attractive option for conservative investors.
See More
Natural Gas Demand Fuels Pipeline Stock Growth
- Energy Transition Opportunity: With surging global electricity demand, natural gas demand continues to rise, prompting Energy Transfer to invest at least $5 billion in expansion projects by 2026, which is expected to drive earnings growth of about 10% and support annual dividend increases of 3% to 5%.
- Infrastructure Project Progress: Energy Transfer is constructing multiple natural gas infrastructure projects, including the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Transwestern Pipeline expansion, both expected to enter commercial service by 2030, providing strong growth visibility.
- Kinder Morgan's Market Leadership: As the operator of the largest natural gas infrastructure network in the U.S., Kinder Morgan transports 40% of the nation's natural gas and has secured $10 billion in expansion projects, further enhancing its growth outlook while expecting mid-single-digit earnings growth this year.
- High Dividend Yield Potential: The surge in natural gas demand will drive new pipeline projects for Energy Transfer and Kinder Morgan, enabling them to grow future cash flows and continue increasing their high-yield dividends, potentially turning a $150 investment into a growing income stream and larger future returns.
See More
Three Stocks to Buy and Hold for the Long Term
- Energy Transition Leader: Energy Transfer LP reported an 8% increase in adjusted EBITDA for Q4 2025, with distributable cash flow reaching $2.04 billion, indicating strong long-term investment appeal despite a slight dip in net income, supported by a 7% dividend yield and consistent distribution growth.
- Uranium Mining Leader: Cameco's revenue rose 11% year-over-year in 2025, with basic earnings per share soaring 237%, and a net margin of 16.9%, capturing 15% of the global uranium supply, benefiting from rising nuclear energy demand and showcasing robust growth potential.
- AI Powerhouse: Palantir's total revenue surged 56% to $4.48 billion in 2025, with U.S. revenue up 75%, and adjusted free cash flow hitting $2.27 billion, reflecting its strong growth and market leadership in the AI sector.
- Financial Resilience: Palantir holds $7.2 billion in cash and short-term U.S. Treasury securities against only $230 million in debt, demonstrating exceptional financial flexibility and risk mitigation, providing a solid foundation for future expansion.
See More
Investors Should Avoid High-Risk Investments
- Investment Strategy Shift: Amid rising oil prices, investors should focus on stable income sources like Enterprise Products Partners (EPD) with a 6.1% distribution yield, avoiding high-risk three-point investment strategies to ensure long-term financial security.
- Infrastructure Investment Opportunities: EPD boasts over 50,000 miles of pipelines and more than 300 million barrels of liquid storage capacity, maintaining stable cash flow and distribution growth despite oil price fluctuations, demonstrating its resilience in the energy market.
- Energy Transition Trends: Energy Transfer (ET) is expanding in AI and energy infrastructure, signing long-term agreements with multiple states' utility companies and data centers, indicating its strategic position in future energy demand growth with a 7.1% distribution yield.
- Emerging Market Potential: Mach Natural Resources (MNR), as a young MLP, has shown lackluster performance post-IPO, yet its 4.2x valuation is significantly below the industry average, highlighting potential growth opportunities in the Anadarko Basin with a distribution yield of 14.8%.
See More
Sunoco LP Completes $1.2 Billion Bond Offering
- Upsized Bond Offering: Sunoco LP announced the pricing of its private offering of 5.375% senior notes due 2031 and 5.625% senior notes due 2034 at 100%, raising a total of $600 million, which reflects strong market demand as the offering was increased from an initial size of $500 million.
- Clear Use of Proceeds: The net proceeds from this offering will be used to fully redeem NuStar Logistics' 6.000% senior notes due 2026 and Sunoco's own 6.000% senior notes due 2027, which is expected to significantly reduce the company's debt burden and optimize its capital structure.
- Compliance and Market Positioning: The notes have not been registered under the Securities Act and are being offered only to qualified institutional buyers, indicating Sunoco's proactive approach to seeking compliant financing channels to support its business expansion.
- Infrastructure Advantage: With over 14,000 miles of pipeline and 160 terminals across North America and Europe, Sunoco LP distributes over 15 billion gallons of fuel annually, providing a robust operational foundation that supports its debt financing and enhances its competitive position in the market.
See More
Sunoco Plans $1 Billion Senior Notes Offering
- Financing Plan: Sunoco announced its intention to issue $1 billion in senior notes through a private placement, consisting of $500 million due in 2031 and $500 million due in 2034, aimed at optimizing its capital structure and reducing financing costs.
- Debt Redemption: The net proceeds from this offering will be used to fully redeem NuStar Logistics' 6.000% senior notes due 2026 and its own 6.000% senior notes due 2027, thereby alleviating future interest burdens and improving financial flexibility.
- Credit Facility Utilization: Before redeeming the 2027 notes, Sunoco may use the proceeds to repay outstanding borrowings under its revolving credit facility, which will further enhance the company's liquidity and financial stability.
- Regulatory Compliance: The notes have not been registered under the U.S. Securities Act of 1933 and will be offered only to qualified institutional buyers and non-U.S. persons, ensuring compliance with relevant regulations and attracting suitable investors.
See More
Analysis of Energy Transfer's Dividend Growth
- Stable Dividend Growth: Energy Transfer has consistently increased its dividend every quarter from 2022 to 2025, demonstrating strong dividend growth capabilities with a coverage ratio of 1.8x, attracting numerous income-focused investors.
- Ambitious Investment Plans: The company plans to invest billions in capital over the coming years, expecting annual dividend growth of 3% to 5%, which, combined with a 7% yield, could provide investors with approximately 10% long-term returns.
- Historical Risk Warning: Despite the current positive dividend growth, the company cut its dividend in half during the energy downturn of 2020 due to the pandemic, which may affect investor confidence due to this historical precedent.
- Competitor Analysis: Compared to other midstream companies, Energy Transfer's dividend track record is less impressive than that of Enterprise Products Partners (EPD), which has achieved 27 consecutive annual increases and maintains a 6% yield, making it a more attractive option for conservative investors.
See More
