Energy Transfer LP (ET), that sprawling titan of the North American midstream energy sector, rather resembles a butler who’s been tasked with juggling both the silverware and the champagne flutes at a particularly boisterous garden party. With over 140,000 miles of pipelines crisscrossing the continent like so many strands of spaghetti on a plate, it ferries natural gas, natural gas liquids, and crude oil to their respective destinations with an efficiency that would make even Jeeves nod in approval.
Now, if one were to glance back at the last five years, one might observe that this limited partnership has performed something of a financial pas de deux, pirouetting past both the S&P 500 and the broader energy sector with the grace of a swan-or perhaps more accurately, the tenacity of a bulldog. But is Energy Transfer stock a buy now? Ah, there’s the rub, as Shakespeare (or perhaps a broker with a flair for the dramatic) might say.
For Growth Investors: A Dashedly Tricky Proposition
Growth investors, those restless souls forever chasing the next big thing, may find themselves regarding Energy Transfer with the same enthusiasm one reserves for a soggy biscuit at tea time. After all, it’s not difficult to unearth tech stocks that promise to grow faster than a prize-winning pumpkin at a county fair. And Wall Street, ever the persnickety critic, seems to share this view. Analysts surveyed by S&P Global Intelligence project a modest revenue growth of 8.4% and earnings growth of 9.6% for the coming year-respectable numbers, to be sure, but hardly the stuff of fireworks or ticker-tape parades.
And yet, dear reader, beneath this veneer of sobriety lies a business that hums along with the quiet confidence of a well-oiled machine. In its most recent quarter, Energy Transfer set records for midstream gathered volumes, crude oil transportation, NGL transportation, and NGL exports-a veritable smorgasbord of achievements. Moreover, the company is investing in projects that could propel future growth, such as expanding the Transwestern Pipeline by 1.5 billion cubic feet per day. One might say they’re laying the groundwork for a rather splendid future, much like a gardener planting tulip bulbs in anticipation of spring.
But wait, there’s more! The burgeoning demand for artificial intelligence has sparked a veritable frenzy of data center construction, each requiring copious amounts of electricity. As of the second quarter of 2025, Energy Transfer had received around 200 requests to connect to data centers across 15 states and inked a deal with CloudBurst to supply natural gas to its facilities in Central Texas. It’s enough to make one wonder whether these fellows are running a pipeline company or secretly moonlighting as tech moguls.
Of course, we mustn’t forget the distribution, which adds a delightful cherry atop this financial sundae. All things considered, I daresay Energy Transfer presents a “definite maybe” for growth investors-a phrase that sounds oxymoronic but somehow feels fitting here.
For Value Investors: A Capital Idea
Ah, but where growth investors may dither, value investors will surely perk up like a hound catching the scent of a fox. Energy Transfer’s units currently trade at a forward earnings multiple of 10.2, lower than most of its peers, and its price/earnings-to-growth (PEG) ratio stands at a fetching 0.75-a figure that practically screams “bargain!” from the rooftops. Indeed, any PEG ratio below 1 is generally regarded as a sign that one ought to don one’s pith helmet and commence treasure hunting forthwith.
The management team, those clever clogs, prefers to measure value using enterprise value to EBITDA-a metric that places Energy Transfer squarely in the bargain bin compared to its rivals. It’s as though they’ve stumbled upon a vintage bottle of claret at a garage sale and are politely declining to mention how little they paid for it.
For Income Investors: Absolutely Splendid
Is Energy Transfer a stock for income investors to snap up quicker than a debutante accepting a dance card? I should think so, and then some. The LP’s distribution yield clocks in at a robust 7.48%, making it one of the juiciest plums in the midstream energy orchard. No peer of comparable size offers a higher yield, and the distribution appears as sturdy as a Victorian oak table.
Energy Transfer maintains ample coverage with its distributable cash flow, and its leverage ratios sit comfortably within target ranges. Management expects to grow the distribution by 3% to 5% annually-a prospect as heartening as discovering an extra slice of cake on the dessert tray. True, the distribution did take a tumble during the darkest days of the COVID-19 pandemic, but it rebounded with alacrity, much like a gentleman recovering his monocle after a minor stumble.
Barring another catastrophe of biblical proportions, I suspect Energy Transfer’s distribution will continue to charm income investors like a well-timed bon mot at a dinner party. 😊
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2025-09-06 12:38