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ET vs. KMI: Which Energy Infrastructure Stock Offers More Potential?
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Key Takeaways
ET shows stronger 2026 and 2027 earnings estimate revisions than KMI over the past 60 days.
ET's ROE and forward P/E are 11.55% and 11.84X compared with KMI's 10.46% and 20.14X.
KMI has lower debt-to-capital at 49.52% versus ET's 57.52%, offsetting some of its advantages
The Zacks Oil & Gas – Production & Pipelines industry remains critical to the nation’s energy security and economic stability. An extensive pipeline network transports crude oil, natural gas and other hydrocarbons from major producing regions, including the Permian, Bakken and Marcellus basins, to refineries, export terminals and end markets.
The industry’s long-term outlook remains favorable, supported by steady domestic energy demand, rising liquefied natural gas exports and utilities’ continued shift from coal to natural gas. Energy Transfer (ET - Free Report) and Kinder Morgan (KMI - Free Report) are two major midstream operators, giving investors exposure to essential energy transportation, storage and processing infrastructure while offering attractive income potential.
Growth prospects are also supported by infrastructure upgrades, improving operating technologies and efforts to enhance efficiency and reduce emissions. Amid global energy uncertainty, U.S. pipeline infrastructure has taken on greater strategic importance by helping move energy supplies to domestic and international markets. Moreover, long-term, fee-based contracts provide midstream operators with relatively stable cash flows and limit their direct exposure to commodity price swings.
Energy Transfer operates a highly diversified asset base spanning crude oil, natural gas, natural gas liquids and refined-product pipelines, along with storage and processing facilities. The company’s strong Permian Basin presence, interest in the Dakota Access Pipeline and export infrastructure further expand its reach and support cash flow generation.
Kinder Morgan offers a relatively stable investment profile, supported by its extensive midstream network and strong focus on natural gas transportation. Long-term, fee-based contracts provide steady cash flows, while disciplined capital allocation, a solid dividend and investments in renewable natural gas support resilience and long-term growth. These strengths make KMI an appealing option for income-focused investors seeking relatively lower exposure to commodity price volatility.
Meanwhile, continued growth in U.S. hydrocarbon production is sustaining demand for midstream transportation, storage and processing infrastructure. Against this backdrop, comparing the fundamentals of Energy Transfer and Kinder Morgan can help assess which stock currently offers the stronger investment case.
KMI & ET’s Earnings Growth Projections
The Zacks Consensus Estimate for KMI’s 2026 and 2027 earnings per share have moved up 4% and 1.97%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
The same for ET’s 2026 and 2027 earnings per share have gone up 19.31% and 11.84%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (“ROE”) is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value.
KMI’s current ROE is 10.46% compared with ET’s 11.55%.
Image Source: Zacks Investment Research
Valuation
Energy Transfer currently appears to be trading at a discount compared with Kinder Morgan on a forward 12-month Price/Earnings basis.
ET is currently trading at 11.84X, while KMI is trading at 20.14X.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Oil-Energy sector is a capital-intensive one and huge investments are required at regular intervals to upgrade, maintain and expand operations. The usage of new evolving technology also requires investments. Therefore, the companies operating in the sector borrow from the market and add it to their internal cash generation to fund the long-term investments.
ET’s debt-to-capital currently stands at 57.52% compared with KMI’s 49.52%.
Image Source: Zacks Investment Research
Summing Up
Energy Transfer and Kinder Morgan leverage their extensive pipeline networks and supporting infrastructure to efficiently transport hydrocarbons from key producing regions to end markets.
Although KMI uses relatively less debt than ET to fund its operations, the latter’s stronger earnings estimate revisions, cheaper valuation and superior ROE make it a more attractive option in the midstream space.
Both stocks currently have a Zacks Rank #3 (Hold), but based on the above discussion, ET has a clean edge on KMI.
View the Zacks #1 Rank List
Image: Bigstock
ET vs. KMI: Which Energy Infrastructure Stock Offers More Potential?
Key Takeaways
The Zacks Oil & Gas – Production & Pipelines industry remains critical to the nation’s energy security and economic stability. An extensive pipeline network transports crude oil, natural gas and other hydrocarbons from major producing regions, including the Permian, Bakken and Marcellus basins, to refineries, export terminals and end markets.
The industry’s long-term outlook remains favorable, supported by steady domestic energy demand, rising liquefied natural gas exports and utilities’ continued shift from coal to natural gas. Energy Transfer (ET - Free Report) and Kinder Morgan (KMI - Free Report) are two major midstream operators, giving investors exposure to essential energy transportation, storage and processing infrastructure while offering attractive income potential.
Growth prospects are also supported by infrastructure upgrades, improving operating technologies and efforts to enhance efficiency and reduce emissions. Amid global energy uncertainty, U.S. pipeline infrastructure has taken on greater strategic importance by helping move energy supplies to domestic and international markets. Moreover, long-term, fee-based contracts provide midstream operators with relatively stable cash flows and limit their direct exposure to commodity price swings.
Energy Transfer operates a highly diversified asset base spanning crude oil, natural gas, natural gas liquids and refined-product pipelines, along with storage and processing facilities. The company’s strong Permian Basin presence, interest in the Dakota Access Pipeline and export infrastructure further expand its reach and support cash flow generation.
Kinder Morgan offers a relatively stable investment profile, supported by its extensive midstream network and strong focus on natural gas transportation. Long-term, fee-based contracts provide steady cash flows, while disciplined capital allocation, a solid dividend and investments in renewable natural gas support resilience and long-term growth. These strengths make KMI an appealing option for income-focused investors seeking relatively lower exposure to commodity price volatility.
Meanwhile, continued growth in U.S. hydrocarbon production is sustaining demand for midstream transportation, storage and processing infrastructure. Against this backdrop, comparing the fundamentals of Energy Transfer and Kinder Morgan can help assess which stock currently offers the stronger investment case.
KMI & ET’s Earnings Growth Projections
The Zacks Consensus Estimate for KMI’s 2026 and 2027 earnings per share have moved up 4% and 1.97%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
The same for ET’s 2026 and 2027 earnings per share have gone up 19.31% and 11.84%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (“ROE”) is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value.
KMI’s current ROE is 10.46% compared with ET’s 11.55%.
Image Source: Zacks Investment Research
Valuation
Energy Transfer currently appears to be trading at a discount compared with Kinder Morgan on a forward 12-month Price/Earnings basis.
ET is currently trading at 11.84X, while KMI is trading at 20.14X.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Oil-Energy sector is a capital-intensive one and huge investments are required at regular intervals to upgrade, maintain and expand operations. The usage of new evolving technology also requires investments. Therefore, the companies operating in the sector borrow from the market and add it to their internal cash generation to fund the long-term investments.
ET’s debt-to-capital currently stands at 57.52% compared with KMI’s 49.52%.
Image Source: Zacks Investment Research
Summing Up
Energy Transfer and Kinder Morgan leverage their extensive pipeline networks and supporting infrastructure to efficiently transport hydrocarbons from key producing regions to end markets.
Although KMI uses relatively less debt than ET to fund its operations, the latter’s stronger earnings estimate revisions, cheaper valuation and superior ROE make it a more attractive option in the midstream space.
Both stocks currently have a Zacks Rank #3 (Hold), but based on the above discussion, ET has a clean edge on KMI.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.