THEY SAY THE MARKET IS A CAGE RATTLED BY MAD DOGS, AND ENERGY TRANSFER (ET) IS THE FERAL HOUND LURCHING ON THE EDGE OF THE PEN. ITS UNITS ARE SITTING 18% BELOW THIS YEAR’S HIGH, A PLUMMET SO SHARP IT COULD DOUBLE AS A STAIRCASE TO HELL. BUT HERE’S THE TWIST: THIS ISN’T A FALL-IT’S A FRENZIED DANCE WITH THE DEVIL, AND THE DIVIDEND HUNTER WHO DARES TO JUMP IN MAY JUST COME OUT WITH A GOLDEN TICKET.
THE MLP’S HEADWINDS ARE LIKE A STORM OF ROTTEN EGGS-UNPLEASANT, UNEXPECTED, AND TEMPORARY. BUT BEHIND THE SMELL LIES A GROWTH ENGINE THAT’S STILL PUMPING OIL-SLICKED DREAMS INTO THE SYSTEM. THE K-1 FORM? A BUREAUCRATIC NIGHTMARE, BUT FOR THOSE WHO CAN HANDLE IT, IT’S THE KEY TO A LOCKER FULL OF DIVIDENDS.
DRILLING DOWN INTO THE DIP
ENERGY TRANSFER FIRST DREAMED OF $16.1-$16.5 BILLION IN ADJUSTED EBITDA THIS YEAR, A NUMBER SO BOLD IT MADE WALL STREET SQUINT LIKE IT WAS TRYING TO SEE THROUGH A FOGGED-UP WINDOW. BUT NOW? THE COMPANY’S GROWTH IS SLOWING LIKE A DRUNK ON A TIGHTROPE, ITS CATALYSTS FADING FASTER THAN A CIGARETTE IN A HURRICANE. NO MAJOR ACQUISITIONS IN A YEAR? THAT’S LIKE RUNNING A FUEL STATION WITHOUT GAS.
AND THEN THE COMMODITY PRICES CAME ALONG, TURNING THE EBITDA OUTLOOK INTO A FROZEN PIZZA. THE MLP NOW EXPECTS TO LAND AT THE LOW END OF ITS GUIDANCE-A SCENE STRAIGHT OUT OF A HORROR FILM WHERE THE HERO IS ALWAYS LAST TO KNOW.
SO NOW, ENERGY TRANSFER TRADES AT 9X EARNINGS, A VALUATION SO LOW IT MAKES A BARGAIN BIN LOOK EXPENSIVE. BUT HERE’S THE TRICK: IT’S NOT JUST CHEAP-IT’S A GOLDEN GOOSE WITH A BUNCH OF EGGS WAITING TO HATCH.
THE COMING REACCELERATION
BUT HERE’S WHERE THE STORY GETS INTERESTING. ENERGY TRANSFER IS SPENDING $5 BILLION ON GROWTH CAPITAL PROJECTS-A SPREE OF INFRASTRUCTURE THAT COULD MAKE A HEDGE FUNDER WEEP. THE NELANDER FLEXPORT NGL EXPANSION? A MONOLITH OF PROGRESS. THE HUGH BRINSON PIPELINE? A GARGANTUAN PIPE THAT’S GONNA START SPITTING OUT CASH BY 2026. IT’S LIKE WATCHING A BUILDER DIG A HOLE, BUT YOU KNOW THE TUNNEL IS GONNA LEAD TO A GOLD MINE.
AND SUNOCO? THAT’S THE GOLDEN GOOSE. ENERGY TRANSFER OWNS A SLICE OF IT, AND NOW SUNOCO’S $9.3 BILLION ACQUISITION OF PARKLAND IS GONNA TURN THE MLP INTO A DIVIDEND-SPITTING DRAGON. JUST WAIT UNTIL THAT DEAL CLOSES-THE EARNINGS WILL FLOW LIKE A FLOOD IN A DESERT.
ADDING MORE FUEL TO ITS GROWTH ENGINE
THE DESERT SOUTHWEST EXPANSION? A $5.3 BILLION PIPELINE THAT’S GONNA BE THE STAR OF THE SHOW BY 2029. THE LAKE CHARLES LNG TERMINAL? A DELAYED TITAN THAT’S GONNA GET APPROVAL THIS YEAR-A BLESSING FOR THOSE WHO’VE BEEN WAITING LONG ENOUGH. AND THEN THERE’S THE DATA CENTER AND POWER PLANT DEMAND-A FIRE THAT’S GONNA BURN THROUGH EVERY PIPE IN THE SYSTEM.
AND LET’S NOT FORGET THE FINANCIAL POSITION. ENERGY TRANSFER IS IN BETTER SHAPE THAN A FORTUNE 500 CEO DURING A STOCK MARKET RALLY. IT’S GOT THE CASH TO SPEND, THE CREDIBILITY TO BORROW, AND THE HISTORY OF MAKING DEALS SO SIZABLE THEY MAKE WALL STREET SNORT.
A GREAT TIME TO BUY
WITH THE UNIT PRICE DROPPING LIKE A STONE IN A WELL, ENERGY TRANSFER IS NOW TRADING AT A VALUATION THAT MAKES A BARGAIN BIN LOOK EXPENSIVE. THE DISTRIBUTION YIELD? A SIREN SONG FOR DIVIDEND HUNTERS, CURRENTLY HOWLING AT 7.6%. THIS ISN’T JUST A BUY-IT’S A CHASE AFTER A FLYING FISH IN A STORM OF OPPORTUNITY.
SO IF YOU’RE LOOKING FOR A STOCK THAT’S GONNA TURN YOUR PORTFOLIO INTO A GOLDEN TUNNEL, ENERGY TRANSFER IS THE ONE TO WATCH. JUST DON’T EXPECT THE RIDE TO BE SMOOTH-IT’S GONNA BE A WILD, OIL-SLICKED RIDE WITH A DIVIDEND AT THE END OF THE TRACK. 🚀
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2025-09-22 10:50