S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
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Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
What recession? Professional forecasters raise expectations for US economy in 2024
Stock market today: Asian shares mostly decline, while Tokyo again touches a record high
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
What recession? Professional forecasters raise expectations for US economy in 2024
Stock market today: Asian shares mostly decline, while Tokyo again touches a record high
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
What recession? Professional forecasters raise expectations for US economy in 2024
Stock market today: Asian shares mostly decline, while Tokyo again touches a record high
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move (Ad)
What recession? Professional forecasters raise expectations for US economy in 2024
Stock market today: Asian shares mostly decline, while Tokyo again touches a record high

Energy Transfer Is A Value Among High-Yield Energy Infrastructure

Energy Transfer Is A Value Among High-Yield Energy Infrastructure

The entire energy infrastructure complex is moving higher and Energy Transfer LP (NYSE: ET) may lead the bunch. The company’s diversified approach to energy and its reliance on fee-based income make it stand out from other energy companies and its own peers. Trading at 7.33X its earnings it is a value compared to peers like Kinder Morgan (NYSE: KMI), Enbridge (NYSE: EN), and The Williams Companies (NYSE: WMB) which trade in the range of 15X to 20X their earnings and there is no difference in dividend yield. 

Energy Transfer is paying out a solid 6% with shares trading near $11.25 compared to 5.1% with The Williams Companies and 6.15% for Kinder Morgan and the good news does not end here. Energy Transfer cut is dividend distribution at the start of the pandemic in order to preserve capital and it is on track to return the payment to its former glory. This means investors can expect a whopping 32% worth of distribution increases and there is a high probability the company will continue to increase the payout beyond the pre-pandemic levels because the outlook for business is robust. 

“In July 2022, Energy Transfer announced a quarterly cash distribution of $0.23 per common unit ($0.92 annualized) for the quarter ended June 30, 2022. This distribution represents a more than 50% increase over the second quarter of 2021. Future increases to the distribution level will continue to be evaluated quarterly with the ultimate goal of returning distributions to the previous level of $0.305 per common unit per quarter ($1.22 annualized) while balancing the Partnership’s leverage target, growth opportunities and unit buybacks,” said the company in the press release. 


Energy Transfer Results Fueled By Expansion 

Energy Transfer had a great quarter that was fueled not only by underlying demand but by expansion in key areas. The company has been working to expand capacity in natural gas and petroleum liquids collection, storage, and delivery and those efforts are paying off. The company reported $25.9 billion in net revenue for the 2nd quarter which beat the Marketbeat.com consensus by 2700 basis points but take that with a grain of salt. The strength was driven by higher volumes across all segments plus the addition of acquisitions made last year. On a segment basis, the natural gas segment was strongest and produced record volumes. 

Moving on to the income, the company produced an outsized increase in net earnings which came in more than double last year’s results but there was some margin pressure in regard to adjusted EBITDA and distributable cash flow. The adjusted EBITDA grew by only 22% while the DCF grew a more robust 35% compared to the top-line 71.5% in growth but this is due in large part to aggressive expansion plans. As for the guidance, the company raised and narrowed its guidance for adjusted EBITDA by 3.5% at the low and 1.25% at the high-end of the range. 

The Technical Outlook: Energy Transfer Is Trending Higher 

Shares of Energy Transfer are trending in line with the rest of the group and are on track to set a new multi-year high in the wake of the results. The stock is up more than 2.0% in premarket trading and already at a multi-week high, if the market follows through on this move it could easily hit the $12.5 level and breakthrough into the new all-time-high territory. In that scenario, the next target is near $14. If no new highs are made this stock may be rangebound for the next few months. 

Energy Transfer Is A Value Among High-Yield Energy Infrastructure
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Should you invest $1,000 in Energy Transfer right now?

Before you consider Energy Transfer, you'll want to hear this.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Energy Transfer (ET)
2.4717 of 5 stars
$14.89+0.7%8.46%13.66Moderate Buy$17.57
Kinder Morgan (KMI)
4.176 of 5 stars
$17.25-0.1%6.55%16.12Hold$20.50
Enbridge (ENB)
2.6007 of 5 stars
$34.80-0.3%7.79%16.57Hold$55.20
Williams Companies (WMB)
3.3832 of 5 stars
$34.94+0.1%5.12%13.34Hold$37.00
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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