We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Energy Transfer's Midstream Strength Boost Long-Term Growth?
Read MoreHide Full Article
Key Takeaways
Energy Transfer operates a vast midstream network spanning gas, NGLs, crude oil and refined products.
ET's integrated assets and fee-based contracts support steady cash flow and long-term growth prospects.
ET's earnings per unit are estimated to rise 8.59% in 2025 and 11.15% in 2026.
Energy Transfer LP (ET - Free Report) is one of the most diversified midstream companies in the United States, with strategically located assets that span natural gas, natural gas liquids (NGLs), crude oil and refined products. The firm owns and operates, either through wholly owned subsidiaries or joint ventures, an extensive network of natural gas gathering pipelines, processing plants, treating and conditioning facilities, with a combined processing capacity of nearly 12.9 Bcf/d.
Energy Transfer’s midstream operations center on gathering, compression, treating, blending and processing of natural gas, with assets strategically located across key producing basins and major shale regions of the United States. A significant share of these midstream assets is integrated with the firm’s intrastate transportation, storage and NGL infrastructure.
Natural gas produced from some wells fails to meet downstream pipeline standards or commercial use requirements. Energy Transfer addresses this issue by using its treating plants to remove carbon dioxide, hydrogen sulfide and other impurities, ensuring the gas meets pipeline quality specifications. The firm’s midstream segment primarily generates results from margins on natural gas gathered, transported, bought and sold through pipelines, as well as from natural gas and NGL volumes processed and treated at its facilities.
Energy Transfer’s integrated midstream system, strengthened by scale efficiencies and long-term, fee-based contracts, enables it to maintain steady cash flow generation.
Collectively, these assets provide a strong competitive moat, positioning Energy Transfer as a compelling investment option for both income-oriented investors and those seeking long-term growth.
Pipeline Firms Leveraging Midstream Assets
Midstream assets provide pipeline operators with a competitive edge by ensuring steady cash flows through fee-based contracts, enhancing operational integration across gathering, processing, storage and transportation. These assets also offer diversification, reduce exposure to commodity price volatility and support long-term growth in energy demand.
Kinder Morgan (KMI - Free Report) benefits from its vast natural gas pipeline and storage network, generating stable fee-based revenues. Similarly, The Williams Companies (WMB - Free Report) leverages its midstream assets, particularly in the Marcellus and Utica shales, to capture growing natural gas demand. Both firms gain resilience, diversification and consistent cash flows from their integrated midstream platforms.
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates year-over-year growth of 8.59% and 11.15%, respectively.
Image Source: Zacks Investment Research
ET Stock Returns Lower Than Its Industry
Energy Transfer’s trailing 12-month return on equity (“ROE”) is 11.08%, lower than its industry average of 13.85%. ROE, a profitability measure, indicates how effectively a company utilizes its shareholders’ funds to generate income.
Image: Bigstock
Can Energy Transfer's Midstream Strength Boost Long-Term Growth?
Key Takeaways
Energy Transfer LP (ET - Free Report) is one of the most diversified midstream companies in the United States, with strategically located assets that span natural gas, natural gas liquids (NGLs), crude oil and refined products. The firm owns and operates, either through wholly owned subsidiaries or joint ventures, an extensive network of natural gas gathering pipelines, processing plants, treating and conditioning facilities, with a combined processing capacity of nearly 12.9 Bcf/d.
Energy Transfer’s midstream operations center on gathering, compression, treating, blending and processing of natural gas, with assets strategically located across key producing basins and major shale regions of the United States. A significant share of these midstream assets is integrated with the firm’s intrastate transportation, storage and NGL infrastructure.
Natural gas produced from some wells fails to meet downstream pipeline standards or commercial use requirements. Energy Transfer addresses this issue by using its treating plants to remove carbon dioxide, hydrogen sulfide and other impurities, ensuring the gas meets pipeline quality specifications. The firm’s midstream segment primarily generates results from margins on natural gas gathered, transported, bought and sold through pipelines, as well as from natural gas and NGL volumes processed and treated at its facilities.
Energy Transfer’s integrated midstream system, strengthened by scale efficiencies and long-term, fee-based contracts, enables it to maintain steady cash flow generation.
Collectively, these assets provide a strong competitive moat, positioning Energy Transfer as a compelling investment option for both income-oriented investors and those seeking long-term growth.
Pipeline Firms Leveraging Midstream Assets
Midstream assets provide pipeline operators with a competitive edge by ensuring steady cash flows through fee-based contracts, enhancing operational integration across gathering, processing, storage and transportation. These assets also offer diversification, reduce exposure to commodity price volatility and support long-term growth in energy demand.
Kinder Morgan (KMI - Free Report) benefits from its vast natural gas pipeline and storage network, generating stable fee-based revenues. Similarly, The Williams Companies (WMB - Free Report) leverages its midstream assets, particularly in the Marcellus and Utica shales, to capture growing natural gas demand. Both firms gain resilience, diversification and consistent cash flows from their integrated midstream platforms.
ET Stock’s Price Performance
Units of ET have risen 10.8% in the past year compared with the Zacks Oil and Gas - Production Pipeline - MLB industry’s growth of 3.5%.
Image Source: Zacks Investment Research
ET’s Earnings Estimates
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates year-over-year growth of 8.59% and 11.15%, respectively.
Image Source: Zacks Investment Research
ET Stock Returns Lower Than Its Industry
Energy Transfer’s trailing 12-month return on equity (“ROE”) is 11.08%, lower than its industry average of 13.85%. ROE, a profitability measure, indicates how effectively a company utilizes its shareholders’ funds to generate income.
Image Source: Zacks Investment Research
ET’s Zacks Rank
Energy Transfer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here