Energy Transfer Partners

ET

Market cap $66B

Kinder Morgan leads Energy Transfer on earnings revisions, lower leverage and ROE, with stronger six-month gains.

Energy Transfer remains a Strong Buy after a jaw-dropping Q1, with distributable cash flow surging to $2.7B and guidance raised by $750M. ET's growth is shifting from risky greenfield projects to high-ROIC brownfield expansions, leveraging irreplaceable existing assets and short-cycle projects, especially in Texas. Many investors are concerned with ET's debt, but a sub-4.0x leverage ratio is practically here.

Energy Transfer (ET) trades around $20 with a 6.55% yield, adjusted EBITDA (up 20% year-over-year), and quarterly distributions climbing, backed by fee-based contracts averaging 18-year terms across huge contracted capacity.

Most income investors default to broad dividend exchange-traded funds (ETFs) for steady payout exposure. Five natural gas producers and midstream operators deliver yields that most diversified dividend ETFs cannot replicate.

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Midstream companies are the "middlemen" of the energy sector and key to U.S. energy infrastructure.

Energy Transfer remains a strong buy, offering undervalued shares, robust distributions, and significant appreciation potential versus peers. ET raised 2026 EBITDA guidance to $18.2–$18.6 billion, reflecting management's confidence in growth and distributable cash flow generation. Substantial capital allocation targets NGL export infrastructure, with ET holding a 20% global export share and expanding capacity across key terminals.

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ET secures long-term, firm natural gas transport contracts with AI data centers, supporting mid-teen returns and considerable earnings growth over the next decade. They also benefit from the ongoing Iran conflict, with further NGL export growth expected given the potentially tightened supply over the next five years and the expanded Flexport capacity. These reasons are also why ET has raised their organic growth capital guidance to $5.7B (+26.6% YoY) and FY2026 adj EBITDA to $18.4B (+15.1% YoY), supporting their multi-year growth prospects.