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Yahoo
12-07-2025
- Business
- Yahoo
5 Brilliant High-Yield Midstream Stocks to Buy Now and Hold for the Long Term
The midstream sector is benefiting from increased natural gas demand. There are several strong stocks in the space with yields between 4% and 10%. Not only do these stocks have high yields, but their distributions are also well covered and rising. 10 stocks we like better than Energy Transfer › Midstream operators aren't flashy, but they crank out dependable cash flow, fund generous distribution payouts, and are set to benefit from surging demand for natural gas tied to artificial intelligence (AI), data centers, and liquid natural gas (LNG) exports. Here are five high-yield stocks with growing distributions that also have solid upside potential. Energy Transfer (NYSE: ET) has a hefty 7.4% yield that's well covered by its distributable cash flow -- operating cash flow minus maintenance capital expenditures (capex) -- thanks to about 90% of earnings before interest, taxes, depreciation, and amortization (EBITDA) coming from fee-based contracts. Many of those contracts are take-or-pay, locking in revenue regardless of volumes. Energy Transfer's footprint in the Permian Basin in Texas positions it to benefit directly from growing power demand and LNG exports. As such, the company is shifting into growth mode, bumping its capex from $3 billion in 2024 to $5 billion this year. It's seeing strong requests related to the data center boom and recently signed a supply agreement with developer Cloudburst for one of the data center projects it is developing in Texas. Also, the long-stalled Lake Charles LNG project looks like it may finally move forward, adding a growth driver. All in all, Energy Transfer is a high-yield name with strong tailwinds. Enterprise Products Partners (NYSE: EPD) has hiked its payout for 26 straight years. Its robust distribution and high yield aren't just safe; they are anchored by one of the steadiest business models and best balance sheets in the space. Roughly 85% of its cash flow comes from fee-based contracts, and many of those include take-or-pay terms with inflation escalators. Enterprise is run conservatively, but it also knows when to pursue expansion. The company currently has $7.6 billion in growth projects, with $6 billion of that set to go live this year. It has also boosted its spending on such projects, taking it from $3.9 billion last year to as much as $4.5 billion this year. If you want a sleep-safe high-yield stock, Enterprise is the right choice. Western Midstream Partners (NYSE: WES) offers a huge 9.4% yield and backs it up with a rock-solid balance sheet. Its leverage ratio sits below a multiple of 3, and its cash flows are anchored by cost-of-service contracts and minimum volume commitments. That makes for consistent results, even in choppy markets. Management is targeting mid-single-digit annual increases in its distributions while investing in select expansion opportunities. The biggest is the Pathfinder produced-water system (to clean up water that's a by-product of drilling), which could top $450 million in cost and should start ramping up in 2026. Western doesn't have a huge growth opportunity in front of it, but if you're looking for a high, safe yield, it's a great option. MPLX (NYSE: MPLX) has been delivering some of the strongest distribution growth in the midstream space the past few years, growing its payout by double digits for three years running. Despite that, its distribution is still covered 1.5 times by cash flow, and its balance sheet is in great shape with leverage at just 3.3 times. That's extremely attractive for a stock with a 7.5% yield. The company's growth is being driven by its natural gas and NGL (natural gas liquids) segment, which handles about 10% of U.S. production. With natural gas demand from LNG exports and AI accelerating, the company is doubling its expansion capex to $1.7 billion in 2025. Its other moves include taking full ownership of the BANGL pipeline and partnering with Oneok in a joint venture to integrate their NGL export infrastructure to offer end-to-end services. Meanwhile, its crude oil logistics business is anchored by its parent, Marathon Petroleum, giving this segment strong visibility. This is a high-yield stock with a well-covered and rising distribution that is positioned for the long term. Kinder Morgan's (NYSE: KMI) 4.1% yield is the lowest here, but the company has the biggest natural gas footprint, with roughly 40% of U.S. natural gas flowing through its system. About 80% of its cash flow comes from volumetric fee-based contracts, with about 64% of its cash flow tied to take-or-pay contracts. That helps give it a steady base. The company is also seeing strong expansion opportunities. Its project backlog surged to $8.8 billion last quarter, up from $3 billion just a year ago. Over 70% of that is tied to power demand, with much of the new buildout targeting AI-related data centers and LNG facilities. These projects are expected to generate strong returns, with management citing 16.7% EBITDA yields on new spending. At the same time, Kinder has also cleaned up its balance sheet in recent years, cutting its leverage multiple from 5.1 in 2017 to 4 in 2024. With new natural gas export demand coming from Asia, Mexico, and Europe -- and domestic power needs rising fast -- Kinder is in the right place at the right time. The stock should continue to be a solid performer in the coming years. Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,432!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,005,854!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Geoffrey Seiler has positions in Energy Transfer, Enterprise Products Partners, and Western Midstream Partners. The Motley Fool has positions in and recommends Kinder Morgan. The Motley Fool recommends Enterprise Products Partners and Oneok. The Motley Fool has a disclosure policy. 5 Brilliant High-Yield Midstream Stocks to Buy Now and Hold for the Long Term was originally published by The Motley Fool
Yahoo
12-07-2025
- Business
- Yahoo
5 Brilliant High-Yield Midstream Stocks to Buy Now and Hold for the Long Term
The midstream sector is benefiting from increased natural gas demand. There are several strong stocks in the space with yields between 4% and 10%. Not only do these stocks have high yields, but their distributions are also well covered and rising. 10 stocks we like better than Energy Transfer › Midstream operators aren't flashy, but they crank out dependable cash flow, fund generous distribution payouts, and are set to benefit from surging demand for natural gas tied to artificial intelligence (AI), data centers, and liquid natural gas (LNG) exports. Here are five high-yield stocks with growing distributions that also have solid upside potential. Energy Transfer (NYSE: ET) has a hefty 7.4% yield that's well covered by its distributable cash flow -- operating cash flow minus maintenance capital expenditures (capex) -- thanks to about 90% of earnings before interest, taxes, depreciation, and amortization (EBITDA) coming from fee-based contracts. Many of those contracts are take-or-pay, locking in revenue regardless of volumes. Energy Transfer's footprint in the Permian Basin in Texas positions it to benefit directly from growing power demand and LNG exports. As such, the company is shifting into growth mode, bumping its capex from $3 billion in 2024 to $5 billion this year. It's seeing strong requests related to the data center boom and recently signed a supply agreement with developer Cloudburst for one of the data center projects it is developing in Texas. Also, the long-stalled Lake Charles LNG project looks like it may finally move forward, adding a growth driver. All in all, Energy Transfer is a high-yield name with strong tailwinds. Enterprise Products Partners (NYSE: EPD) has hiked its payout for 26 straight years. Its robust distribution and high yield aren't just safe; they are anchored by one of the steadiest business models and best balance sheets in the space. Roughly 85% of its cash flow comes from fee-based contracts, and many of those include take-or-pay terms with inflation escalators. Enterprise is run conservatively, but it also knows when to pursue expansion. The company currently has $7.6 billion in growth projects, with $6 billion of that set to go live this year. It has also boosted its spending on such projects, taking it from $3.9 billion last year to as much as $4.5 billion this year. If you want a sleep-safe high-yield stock, Enterprise is the right choice. Western Midstream Partners (NYSE: WES) offers a huge 9.4% yield and backs it up with a rock-solid balance sheet. Its leverage ratio sits below a multiple of 3, and its cash flows are anchored by cost-of-service contracts and minimum volume commitments. That makes for consistent results, even in choppy markets. Management is targeting mid-single-digit annual increases in its distributions while investing in select expansion opportunities. The biggest is the Pathfinder produced-water system (to clean up water that's a by-product of drilling), which could top $450 million in cost and should start ramping up in 2026. Western doesn't have a huge growth opportunity in front of it, but if you're looking for a high, safe yield, it's a great option. MPLX (NYSE: MPLX) has been delivering some of the strongest distribution growth in the midstream space the past few years, growing its payout by double digits for three years running. Despite that, its distribution is still covered 1.5 times by cash flow, and its balance sheet is in great shape with leverage at just 3.3 times. That's extremely attractive for a stock with a 7.5% yield. The company's growth is being driven by its natural gas and NGL (natural gas liquids) segment, which handles about 10% of U.S. production. With natural gas demand from LNG exports and AI accelerating, the company is doubling its expansion capex to $1.7 billion in 2025. Its other moves include taking full ownership of the BANGL pipeline and partnering with Oneok in a joint venture to integrate their NGL export infrastructure to offer end-to-end services. Meanwhile, its crude oil logistics business is anchored by its parent, Marathon Petroleum, giving this segment strong visibility. This is a high-yield stock with a well-covered and rising distribution that is positioned for the long term. Kinder Morgan's (NYSE: KMI) 4.1% yield is the lowest here, but the company has the biggest natural gas footprint, with roughly 40% of U.S. natural gas flowing through its system. About 80% of its cash flow comes from volumetric fee-based contracts, with about 64% of its cash flow tied to take-or-pay contracts. That helps give it a steady base. The company is also seeing strong expansion opportunities. Its project backlog surged to $8.8 billion last quarter, up from $3 billion just a year ago. Over 70% of that is tied to power demand, with much of the new buildout targeting AI-related data centers and LNG facilities. These projects are expected to generate strong returns, with management citing 16.7% EBITDA yields on new spending. At the same time, Kinder has also cleaned up its balance sheet in recent years, cutting its leverage multiple from 5.1 in 2017 to 4 in 2024. With new natural gas export demand coming from Asia, Mexico, and Europe -- and domestic power needs rising fast -- Kinder is in the right place at the right time. The stock should continue to be a solid performer in the coming years. Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,432!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,005,854!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Geoffrey Seiler has positions in Energy Transfer, Enterprise Products Partners, and Western Midstream Partners. The Motley Fool has positions in and recommends Kinder Morgan. The Motley Fool recommends Enterprise Products Partners and Oneok. The Motley Fool has a disclosure policy. 5 Brilliant High-Yield Midstream Stocks to Buy Now and Hold for the Long Term was originally published by The Motley Fool Sign in to access your portfolio
Vogue Singapore
18-06-2025
- Entertainment
- Vogue Singapore
10 queer rom-coms to watch this Pride Month
@aniceindianboyfilm Pride Month is the perfect time to celebrate identity, representation and most of all, love. The origins of Pride date back to 1969, when members of the LGBTQIA+ community rebelled against the police raids at The Stonewall Inn in New York City. It's a powerful time during when the queer community claim their voices are unapologetically bold and free. But Pride doesn't always have to be about vibrant parades and elaborate parties to be meaningful. The celebration can be quiet too. It can look like taking a break from the festivities, curling up on the couch with your favourite snacks, a bottle of wine, and pressing play on the queer rom-coms of your choice. Who can resist a good love story anyway? For decades, romantic comedies have given us unrealistic meet-cutes, overly charming characters and oftentimes happy endings—but what they haven't always given us is inclusivity and diversity. Too often, queer characters were relegated to comic relief or reduced to tired stereotypes. If LGBTQ+ characters were featured in films, they were most likely there to support the growth of the protagonist—often by being the quintessential sassy gay best friend. Thankfully, that's changing. The recent years have seen a new wave of queer romance movies made more mindfully, dedicated to celebrating queer audiences and giving them significant representation on screen. From royal scandals and fake relationships to Bollywood weddings and sweet young queer love, Vogue Singapore rounds up a selection of heart-warming queer rom-coms that give the characters the perfect meet-cutes, angst and the swoon-worthy happy endings they've always deserved. Courtesy of IMDb 1 / 10 Cloudburst This painfully funny story follows Stella and Dotty, an elderly lesbian couple, who after spending a lifetime together find their relationship in peril when Dotty's granddaughter threatens to separate them. Together, the pair flee their nursing home and embark on a Thelma and Louise-style road trip to Nova Scotia to get married. The film beautifully shows that love comes in all forms, and that the love between Stella and Dotty is truly the kind that comes once in a lifetime. Expect both tears and laughter—it's an emotional rollercoaster at times, but one you surely would not want to miss. Watch Cloudburst on Apple TV+. Courtesy of Prime Video 2 / 10 Dating Amber Set in conservative 1990s rural Ireland, Dating Amber follows best friends Eddie and Amber—two closeted teens who decide to fake a relationship to hide their sexualities. As they navigate high school gossip and the pressures of living in a small town, their pretend relationship becomes a safe space. But after a few secret trips together to Dublin, the two teens discover that faking it can only take them so far. Watch Dating Amber on Apple TV+. Courtesy of Colour Yellow Productions 3 / 10 Shubh Mangal Zyada Saavdhan This riotously funny romantic comedy tells the story of Kartik and Aman, a gay couple living in Delhi. Their relationship is challenged when they travel to the latter's hometown to attend a family wedding. When Aman's parents learn about their relationship, tensions rise as they struggle to accept the truth about their son. The film wittily blends humour with a sensitive portrayal of the challenges faced by queer couples in India, who continue to navigate life in a largely unaccepting society. Watch Shubh Mangal Zyada Saavdhan on Amazon Prime. Courtesy of Prime Video 4 / 10 Red, White & Royal Blue Based on the novel by Casey McQuiston, this charming enemies-to-lovers story follows Alex Claremont Daiz—the son of the President of the United States of America and the Prince of Britain, Henry, as the two get into a nasty fight causing an International scandal. Following this, they are forced into a fake friendship to ease tensions. As they spend time together, witty banter gives way to affection and sparks fly. While the plot may be predictable, the chemistry between Taylor Zakhar Perez and Nicholas Galitzine is what truly makes you want to root for them at the end of the day. Watch Red, White & Royal Blue on Amazon Prime. Courtesy of IMDb 5 / 10 D.E.B.S. In this campy spy comedy, a top-secret government agency hires four exceptionally smart high school girls trained to fight crime. When star agent Amy is assigned to capture the notorious villain Lucy Diamond, an unexpected romance blossoms between them; torn between duty and desire, Amy must choose between the love she never expected and the job she worked so hard for. Watch D.E.B.S. on Netflix. Courtesy of Universal Pictures 6 / 10 The Wedding Banquet A remake of the 1993 Oscar-nominated Ang Lee classic of the same name, The Wedding Banquet is a comedy of errors that follows two queer couples—gay partners Chris and Min and lesbian couple Lee and Angela—as they strike a deal to exchange a visa marriage for IVF money. Chaos unfolds when Min's grandmother arrives and throws an extravagant Korean wedding banquet. With a star-studded cast featuring Oscar-nominated Lily Gladstone, SNL star Bowen Yang, Kelly Marie Tran and Han Gi-chan, alongside the legendary Joan Chen and Youn Yuh-jung, this film is a poignant exploration of the raw challenges of starting a queer family. Watch The Wedding Banquet at The Projector. Courtesy of Levantine Films 7 / 10 A Nice Indian Boy Cultures collide in this romantic comedy when Naveen Gavaskar, a shy Indian-American doctor, falls deeply in love with Jay, a confident white photographer raised by Indian parents. As their relationship deepens, Naveen struggles to introduce Jay to his traditional and conservative parents. What follows is a heartfelt and hilarious journey through awkward family dinners, a classic Bollywood-inspired proposal, and a truly authentic story about acceptance. Watch A Nice Indian Boy on Apple TV+. Courtesy of Netflix 8 / 10 Semantic Error With K-dramas flooding our screens, this lovely enemies-to-lovers Korean film might have gone unnoticed by some. Based on the series of the same name, the story follows Sang-woo, a rule-abiding computer science major who removes freeloading classmates from a group project—one of them being the popular design student Jae-young, whose graduation is now at risk. As they are forced to work together, their polar opposite personalities clash, and eventually, sparks fly as hatred gives way to love. This slow-burn romantic comedy shows us that sometimes love is the most beautiful error. Watch Semantic Error on Netflix. Courtesy of Sony Pictures Classics 9 / 10 Saving Face A classic in Asian queer cinema, Saving Face follows Wilhelmina Pang, a young Chinese-American surgeon living in New York City, who is a lesbian but remains closeted to her conservative immigrant family. Wil's world is turned upside down when her mother, pregnant with an unknown man's baby, moves in with her. Things further complicate when she falls in the love with the vivacious ballet dancer Vivian Shing. The film delicately explores tradition, acceptance, identity and love in the most beautiful and heartfelt way. Watch Saving Face on Apple TV+. Courtesy of Mark Lipton 10 / 10 But I'm A Cheerleader A high school student, Meghan has the ideal life that every teenage girl dreams of. She's an excellent student and a popular cheerleader, and she's dating the captain of the football team. So she's shocked when her picture-perfect life goes haywire when her homophobic parents stage an intervention, convinced that she's a lesbian, and send her off to True Directions, a conversion therapy boot camp. At the camp, amidst absurd gender reprogramming drills, she comes across the rebellious lesbian Graham and quickly falls in love with her. As Meghan begins questioning her entire life, she discovers strength in her identity and finds love in the last place she expected. Watch But I'm A Cheerleader on Apple TV+.
Yahoo
07-06-2025
- Business
- Yahoo
1 Magnificent Pipeline Stock Down Nearly 20% to Buy and Hold Forever
At its current share price, Energy Transfer's distribution yields more than 7%, and the payouts have been growing. It has greatly improved its balance sheet and contract structure over the past few years. The master limited partnership has strong growth opportunities ahead of it. 10 stocks we like better than Energy Transfer › One of my favorite pipeline stocks to buy right now is Energy Transfer (NYSE: ET), and investors can pick up the master limited partnership (MLP) on sale, with shares trading down nearly 20% from their high as of this writing. In fact, the stock is one of my largest holdings. Here's why Energy Transfer is a great stock to buy and hold for the long term. Energy Transfer has built one of the largest integrated midstream systems in the U.S., handling the transport, storage, and processing of natural gas, crude oil, natural gas liquids (NGLs), and refined products. Its scale enables it to benefit from rising volumes across the energy value chain, as well as take advantage of price spreads across regions, seasons, and products. For instance, natural gas prices often rise in winter and can vary across the country. Energy Transfer can profit by storing gas ahead of periods of peak demand or by moving it from lower-priced to higher-priced markets. The company also upgrades certain hydrocarbons into more valuable end products. This kind of integrated footprint is hard to replicate, and it makes growth opportunities easier to take advantage of. With a strong position in Texas and the Permian Basin, Energy Transfer has access to low-cost associated gas, putting it in a solid spot to benefit from trends like the country's rising liquefied natural gas (LNG) exports and growing electricity demand tied to the AI infrastructure build-out. Given the opportunities in front of it, Energy Transfer has transitioned into growth mode. It plans to spend around $5 billion in growth capital expenditures (capex) this year, up from $3 billion in 2024. One of its major projects is the Hugh Brinson pipeline, which will transport natural gas out of the Permian to help meet growing natural gas demand in Texas stemming from new AI data center construction. It also signed a deal with data center developer Cloudburst to directly provide natural gas to its AI-focused data center development in central Texas. The company has also received inquiries from more than 60 power plants regarding new connections in 14 states, and requests from more than 200 data centers. Energy Transfer also appears ready to make a final investment decision on its long-awaited Lake Charles, Louisiana, LNG facility. It signed a deal with MidOcean Energy to fund 30% of the project's construction costs in exchange for 30% of the facility's LNG production if the project goes through, while it has also signed several sale and purchase agreements with potential customers. Demand for LNG continues to grow rapidly, with much of the new demand coming from Asia. Shell recently projected that global LNG demand could climb by 60% by 2040, driven both by Asian growth and a broader push for lower-emission energy sources for segments like heavy industry and transportation. Energy Transfer is also in a strong financial position. Building pipelines and other midstream assets is a capital-intensive business, and in 2020, the company cut its distribution in half to reduce leverage and improve its balance sheet. However, its distribution is now above where it was before that cut, and its leverage ratio is toward the low end of its target range of 4 to 4.5 times its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). In fact, the company recently said it was in the best financial shape in its history. On top of its solid balance sheet, the MLP is also in a good position from a contract standpoint. This year, it expects about 90% of its EBITDA to come from fee-based services, meaning it's largely insulated from swings in commodity prices and spread differentials. Additionally, the company said it now has its highest-ever percentage of take-or-pay contracts, which means it gets paid whether or not customers actually use its services. Fee-based contracts with take-or-pay provisions increase the stability of its cash flows and support its distributions. Currently, the company is paying a quarterly distribution of $0.3275 per share, which at recent share prices is good for a forward yield of 7.3%. Management has said it's looking to grow its distribution by 3% to 5% annually. The distribution is well covered. Its distributable cash flow (operating cash flow minus maintenance capex) was more than twice its distribution last quarter. In addition to Energy Transfer being in a strong financial position with growing opportunities, the stock is also cheap on both a historical and relative basis, trading at a forward enterprise-value-to-EBITDA multiple of just 8. Between 2011 and 2016 (before the pandemic), midstream MLPs traded at an average multiple of 13.7, and the stock currently trades at a lower valuation than most of its peers. Now, Energy Transfer is not a risk-free investment. The company carries debt, and falling commodity costs and macroeconomic headwinds can take a toll on fossil fuel volumes. However, given its improved contract structure and balance sheet, along with its current growth opportunities, Energy Transfer's stock should provide investors with both an increasing income stream and solid price appreciation potential. That makes it a magnificent stock to buy and hold for the long run. Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Geoffrey Seiler has positions in Energy Transfer, Enterprise Products Partners, and Western Midstream Partners. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy. 1 Magnificent Pipeline Stock Down Nearly 20% to Buy and Hold Forever was originally published by The Motley Fool
Yahoo
12-05-2025
- Business
- Yahoo
Prediction: With an 8% Yield and Dividend Increases Ahead, Now Is the Time to Buy Energy Transfer
Energy Transfer stock has a high yield with an increasing distribution. The company is also ramping up its growth project spending this year. The stock is cheap on both a relative and historical basis. 10 stocks we like better than Energy Transfer › With a more than 8% yield and an increasing distribution, Energy Transfer (NYSE: ET) stock is a dividend darling. The company announced a 3% increase in its distribution last month, taking it to $1.31 per share on an annualized basis. It generally raises its payout a little each quarter. Meanwhile, it has plans to continue increasing its distribution by about 3% to 5% a year moving forward. Its distribution is well covered by its distributable cash flow (DCF), which is operating cash flow minus maintenance capital expenditures (capex). In the first quarter, its DCF coverage ratio was a robust 2 times, meaning that it generated twice as much DCF as it paid out in distributions. With a much-improved balance sheet, Energy Transfer is well-positioned to continue to grow its distribution moving forward. However, it also has solid growth opportunities in front of it. For midstream energy companies to grow, they need to invest in new projects that will generate solid returns. Right now, Energy Transfer continues to see a lot of attractive opportunities, with it looking to spend $5 billion on growth projects this year. That's a big step up from the $3 billion in growth capex it spent in 2024. Most of these projects will come online in 2025 or 2026, including several Permian processing plant expansions and its Hugh Brinson Pipeline project, which will provide natural gas takeaway from the Permian Basin to help support growing power needs in Texas. It's looking for mid-teens returns on these projects, which will help power growth in 2026 and 2027 as these projects ramp up. The company is also making progress on its Lake Charles, Louisiana, LNG facility and expects to make a final decision on whether to go through with the long-awaited project by year-end. Liquified natural gas (LNG) is a strong, growing market, with Shell recently projecting that LNG demand would rise by 60% by 2040. This is a large project that Energy Transfer has been trying to get off the ground for years. With a different government administration and partners, and potential customers in place, it is moving closer to finally proceeding. Energy Transfer also continues to explore artificial intelligence (AI) data center opportunities. The prior quarter, it announced a deal with data center developer Cloudburst to provide its newest data center project in Texas with natural gas. It said it is in advanced discussions with several other facilities near its footprint to supply, store, and transport natural gas. This includes data centers, as well as gas-fired power plants and industrial and onshore manufacturing plants. It said these projects require very little capital and generate revenue relatively quickly. The company said it expects to make some significant announcements around data centers in the next four to eight weeks. In addition to Texas, it pointed to Arizona as a potential area of data center growth that it could help serve. "We just couldn't be more excited about these opportunities we're chasing," Co-CEO Marshall McCrea said on the earnings call. Turning to its Q1 results, Energy Transfer saw solid growth, with its adjusted EBITDA in the quarter increasing 6% year over year to $4.1 billion. Volumes were up across its systems, including a 10% year-over-year jump in crude volumes, a 4% jump in LNG volumes, and a 3% rise in interstate natural gas volumes. Distributable cash flow (DCF) to partners edged 2% lower to $2.31 billion, down from $2.36 billion a year ago. Looking ahead, Energy Transfer kept its full-year EBITDA guidance of $16.1 billion to $16.5 billion. Energy Transfer is a high-yield stock with a growing distribution that has solid, high-return growth opportunities in front of it. Its distribution is well covered by its DCF, and it's done a great job of deleveraging the past few years. Note that deleveraging is when a company makes its debt more manageable relative to its profitability, improving its financial health. On its earnings call, the company said its balance sheet was the strongest it's been in its history. It's also worth noting that Energy Transfer's business model is well-positioned defensively right now. About 90% of the company's EBITDA this year is expected to come from fee-based operations, where it has no exposure to changing commodity costs or spreads. It also said that a "high percentage" of its contracts are take-or-pay, which means that it gets paid whether or not its customers use its pipelines or services. Meanwhile, with projected mid-teen returns on its growth projects, the company should add around $750 million in adjusted EBITDA from its current capex spending in the coming years. That's solid growth from a steady company. Trading at a forward enterprise value (EV)-to-EBITDA multiple of just 7.7 times, the stock is also cheap both on a relative basis to other midstream master limited partnerships (MLPs) and on a historical basis. In fact, the average midstream MLPs traded at a 13.7x EV/EBITDA multiple between 2011 and 2016. Now looks like a great time to buy the stock while it's still trading at a bargain. With growth projects already in motion and the potential for more announcements tied to AI data centers in the coming months, there's a good chance investor enthusiasm will begin to pick up soon. Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor's total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 5, 2025 Geoffrey Seiler has positions in Energy Transfer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Prediction: With an 8% Yield and Dividend Increases Ahead, Now Is the Time to Buy Energy Transfer was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
