Energy Transfer: A Mildly Interesting Proposition

One gathers Energy Transfer (ET +0.28%) is due to report its quarterly figures on the 17th. A flurry of excitement, no doubt. Though, frankly, one suspects the market’s reaction will be… restrained. A polite cough, perhaps, rather than a roar of approval or, heaven forbid, disapproval.

Looking back over the past three years, this particular company hasn’t managed to generate a truly stirring movement in its share price following an earnings announcement. A 4.3% uptick last May was the most dramatic event, and even that was hardly a spectacle. Modest earnings, predictable guidance – terribly reliable, really. One almost feels obligated to applaud the sheer lack of surprise.

It appears the market was chiefly relieved that tariffs weren’t proving utterly ruinous. A rather low bar for success, wouldn’t you agree? Still, one mustn’t complain when the apocalypse is averted by a mere fraction.

And now, we’re told, even less drama is anticipated. The company, in a fit of uncharacteristic candor, has already issued its guidance for the coming year – a projected EBITDA of $17.3 to $17.7 billion. A 9-10% increase. Perfectly adequate. They’ve also, with commendable honesty, warned that last year’s figures were slightly underwhelming. A 90% fee-based business, you see. Remarkably stable, if lacking in a certain… je ne sais quoi.

They’re planning to spend between $5 and $5.5 billion on growth projects. A rather substantial sum, naturally. Targeting EBITDA build rates below 6x, which should yield mid-teen returns. One assumes the accountants are having a field day. Approximately $900 million in incremental EBITDA once these projects are fully operational. Efficient, if not exactly thrilling.

Should One Bother Before Earnings?

Honestly, darling, don’t fret unduly about acquiring shares ahead of the announcement. It’s unlikely to cause a stampede. However, it is a rather attractive high-yield dividend stock in a sector that, let’s face it, isn’t known for its glamour.

A forward yield of 7.4%, covered 1.7 times over in Q3. Solid. The balance sheet is… present. And they have some promising growth opportunities in the Permian Basin, fuelled by the insatiable appetite of those data centers serving the AI crowd. Cheap natural gas, you see. A rather pedestrian explanation, but effective nonetheless.

Currently, the stock trades at an enterprise value-to-EBITDA multiple of 7.7. A perfectly reasonable valuation, wouldn’t you say? A buy for the long term, perhaps. Though one shouldn’t expect fireworks. Just a steady, reliable… competence. And sometimes, darling, that’s quite enough.

2026-02-13 17:02

Should One Bother Before Earnings?

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