Latest news with #EnergySector
Yahoo
10 hours ago
- Business
- Yahoo
5 Reasons to Buy Energy Transfer Stock Like There's No Tomorrow
Key Points Energy Transfer has improved its balance sheet and its contract structure. The stock has a yield over 7% with a safe and growing distribution. The company also is seeing solid opportunities due to increasing natural gas demand. 10 stocks we like better than Energy Transfer › Energy Transfer (NYSE: ET) isn't a flashy name, but it has one of the best risk-reward profiles in the market right now and a high yield. It's one of the largest holdings in my portfolio. Here are five reasons to buy the midstream energy company's stock like there's no tomorrow. Keep in mind, however, that investing in a master limited partnership means you'll get a Schedule K-1 tax form and need to take some extra steps with your tax filing. 1. A rock-solid financial position After getting overextended during its last growth cycle, Energy Transfer spent the past few years cleaning up its balance sheet. It cut its distribution in 2020 to reduce leverage, and since then, it has paid down debt and funded much of its growth through free cash flow. Today, leverage is at the low end of the pipeline company's target range. On its most recent call with analysts, management said the balance sheet is the strongest it has ever been. That gives it the flexibility to invest in growth projects and return capital to shareholders without the worry of becoming overextended once again. 2. Predictable cash flow Roughly 90% of Energy Transfer's earnings before interest, taxes, depreciation, and amortization (EBITDA) is from fee-based services, where it has no exposure to commodity prices. And many of its contracts are take-or-pay, meaning customers pay whether or not they use the service. That creates stable, recurring cash flow, which is exactly what supports its distribution and growth projects. Last quarter, Energy Transfer said it had a high percentage of take-or-pay contracts. That also helps give the company some of the best visibility it has ever had. 3. A high yield with a safe and growing distribution The company's stock offers a forward yield of 7.5% as I write this, and it's well covered. It is generating twice the cash it needs to support its distribution. Last quarter's distributable cash flow coverage multiple was 2.1, which gives management plenty of room to continue to increase it. It has now raised its distribution for 13 consecutive quarters, and it's well above pre-2020 levels when it had to cut it. Given its coverage ratio, strong balance sheet, and take-or-pay contracts, Energy Transfer is well positioned to grow its distribution in the years ahead. Management plans to raise it by 3% to 5% annually. 4. Increasing natural gas demand is a catalyst Not only has Energy Transfer strengthened its balance sheet and improved its contract structure, the company is also back in growth mode. It plans $5 billion in capital expenditures this year, up from $3 billion last year, and is targeting mid-teens returns on its project slate. These aren't speculative projects; they are tied to real demand with long-term contracts in place. One of its biggest projects is the Hugh Brinson pipeline, which is designed to move natural gas out of the Permian Basin in West Texas to meet growing power demand elsewhere in the state. Energy Transfer has also made progress on its long-delayed Lake Charles liquified natural gas (LNG) project and signed a cost-sharing deal with MidOcean Energy and several other agreements. If the project proceeds, it will open up a new growth avenue tied to LNG exports, with demand expected to rise 60% by 2040. At the same time, artificial intelligence (AI) data centers are becoming a potential source of incremental demand. The company signed a deal with CloudBurst to supply gas to a new AI-focused data center it plans to build in Texas. Management has also said it's in active discussions with more than 60 power plants and over 200 data centers across 14 states. These opportunities require relatively little capital and can generate quick returns. 5. The stock looks too cheap Even with everything going right, Energy Transfer still trades at a forward enterprise-value-to-EBITDA multiple of just 8. That's well below its historical average and a discount to most of its peers. Meanwhile, from 2011 to 2016, midstream master limited partnerships (MLPs) traded at an average EBITDA multiple of around 13.7. Investors still haven't fully adjusted to how much stronger Energy Transfer's business is today. The company has cleaned up its balance sheet, improved its contracts, and is pursuing disciplined growth with solid returns. It offers growth to go along with an enticing yield, making it a solid stock for income-focused investors. Do the experts think Energy Transfer is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Energy Transfer make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,048% vs. just 180% for the S&P — that is beating the market by 867.59%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 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. 5 Reasons to Buy Energy Transfer Stock Like There's No Tomorrow 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
Globe and Mail
6 days ago
- Business
- Globe and Mail
Barclays Remains a Buy on Coterra Energy (CTRA)
Barclays analyst Betty Jiang maintained a Buy rating on Coterra Energy today and set a price target of $37.00. The company's shares closed last Friday at $25.28. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. According to TipRanks, Jiang is an analyst with an average return of -2.3% and a 41.28% success rate. Jiang covers the Energy sector, focusing on stocks such as Chevron, Expand Energy, and APA. In addition to Barclays, Coterra Energy also received a Buy from Mizuho Securities's Nitin Kumar CFA in a report issued on July 11. However, on June 30, Goldman Sachs maintained a Hold rating on Coterra Energy (NYSE: CTRA). CTRA market cap is currently $19.3B and has a P/E ratio of 14.76. Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CTRA in relation to earlier this year. Most recently, in May 2025, Stephen Bell, the EVP – Business Development of CTRA sold 100,000.00 shares for a total of $2,525,000.00.
Yahoo
6 days ago
- Business
- Yahoo
What to Expect From Diamondback Energy's Next Quarterly Earnings Report
Midland, Texas-based Diamondback Energy, Inc. (FANG) operates as an independent oil and gas exploration & production company, with its primary focus on the Permian Basin. Valued at $42.2 billion by market cap, the upstream operator focuses on growth through a combination of acquisitions and active drilling activities. The energy giant is expected to announce its second-quarter results after the market closes on Monday, Aug. 4. Ahead of the event, analysts expect FANG to report a profit of $2.57 per share, down 43.1% from $4.52 per share reported in the year-ago quarter. While the company has missed the Street's bottom-line estimates in one of the past four quarters, it has surpassed the projections on three other occasions. Palantir Just Launched Warp Speed for Warships. Does That Make PLTR Stock a Buy? This Analyst Just Doubled His Price Target on AMD Stock How High Can Nvidia Stock Go as Jensen Huang Heads to China? Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! For the full fiscal 2025, FANG is expected to report an EPS of $12.96, down 21.8% from $16.57 reported in fiscal 2024. In fiscal 2026, its earnings are expected to drop further by 13% year-over-year to $11.28 per share. FANG stock has plummeted 30.5% over the past 52 weeks, significantly underperforming the S&P 500 Index's ($SPX) 11.6% gains and the Energy Select Sector SPDR Fund's (XLE) 2.6% dip during the same time frame. Despite reporting better-than-expected financials, Diamondback Energy's stock prices observed a marginal drop in the trading session after the release of its Q1 results on May 5. The company's topline for the quarter soared 81.8% year-over-year to $4.05 billion, exceeding the consensus estimates by a staggering 13.1%. Meanwhile, its adjusted EPS came in at $4.54, 11% ahead of the Street expectations. However, the company reduced its full-year production and capital expenditure guidance, which likely didn't impress investors. Nevertheless, FANG maintains a consensus 'Strong Buy' rating overall. Of the 28 analysts covering the stock, opinions include 23 'Strong Buys,' three 'Moderate Buys,' and two 'Holds.' Its mean price target of $181.89 suggests a 28.1% upside potential from current price levels. On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
RNZ News
13-07-2025
- Business
- RNZ News
Gentailers squashing competition leading to soaring power prices, group says
Power prices in New Zealand soar as the Prime Minister blames Labour's oil and gas ban. Photo: RNZ / Nate McKinnon Big and small energy consumers are calling for an urgent reform of the sector as soaring power prices undermine confidence and productivity. The group's open letter to Prime Minister Christopher Luxon said many consumers were struggling to keep the heat on this winter, while the wholesale costs for many businesses had more than doubled. "Regional employers are shutting their doors, with hundreds of jobs and decades of investment lost," it said. "Families and communities are being left behind." The government had commissioned an independent high level review of the energy sector , but the group was looking for more than incremental changes. The letter takes aim at the four big power generation companies Genesis, Contact, Mercury and Meridian, also referred to as gentailers, because they compete at the retail level. "When a handful of companies control both generation and retail supply, the competitive pressures that should attract new investors and drive innovation, efficiency, and fair pricing are severely diminished," the letter said. The letter was signed by groups representing big and small energy users, small retail energy suppliers, and a cross-section of industry organisations representing a broad range of sectors. Consumer NZ chief executive Jon Duffy said the state of the energy sector was at odds with Luxon's economic vision. "We're never going to grow the economy if people can't afford the inputs for growth," he said. "What we are concerned about is a lot of people and an increasing number of people are being faced with pretty stark choices about whether they can heat their home or put food on the table. Those sort of tough decisions." Duffy said energy consumers were on the same page when it came to the call for reform. Among the key issues was the speed of development. "Investment in new generation is being delayed, sustaining high prices, and contributing to the energy supply crisis we now face," the letter said. "Our dysfunctional electricity market is holding back New Zealand's productivity, restricting our international competitiveness, and driving up the cost of living." It said the government needed to undertake a comprehensive reform of the sector. "The time for incremental adjustments has passed," it said. "Level the playing field. Put protections in place for consumers and businesses alike. "Unlock investment in low-cost, renewable generation. Put forward an energy strategy that all political parties can sign up to." It said the reforms needed to address the immediate supply challenges as well as the underlying structural problems that created them. "We're running out of gas, and new electricity generation just isn't being built at the rate we need." The group wanted the Prime Minister to make the most of New Zealand's natural resources to create a secure, affordable, renewable electricity system. Luxon told Morning Report's Corin Dann the crux of the problem came down to New Zealand not having enough gas after the former Labour government banned new oil and gas exploration. "We need to have abundant, affordable energy to grow the economy. We need it to make sure Kiwi power bills are lower. "We're repealing the oil and gas ban this quarter. We've got our fast-track regime to get doubling of renewables in place and we're replacing the RMA [Resource Management Act]..." When asked if the government would break-up the gentailers Luxon said the single biggest issue was a supply problem because New Zealand didn't have access to gas "which we desperately need when we don't have enough wind, rain or sun". "We are the only country I know of, Corin, in the whole world that is making the rather unique transition from domestic gas to imported coal. "That is insane, because of an oil and gas ban from the Labour guys and so we are reversing that. That's the single biggest thing we can do." The Prime Minister said gas had been powering mills, manufacturing plants and much of the country's heavy industry. He said the government was doing everything it could to double renewable energy projects including consenting them faster under fast-track legislation. Luxon said the government was "pulling all of those levers" to get electricity bills down. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Yahoo
11-07-2025
- Business
- Yahoo
Why the Energy Sector Needs a Smarter AI Strategy
Artificial intelligence is rapidly changing the world around us as our systems get smarter, and the resource and energy use of large language models grow ever larger. In the energy sector, artificial intelligence represents a double-edged sword: AI could help the sector overcome some of the hurdles involved in maintaining global energy security while we transition to cleaner alternatives, but it could also pose an existential threat to vulnerable power grids if used indiscriminately. Artificial intelligence requires a staggering amount of energy to train and power its complex computations. Energy demand from data centers is on track to double by just 2030 as the sector explodes in growth. As a result, many world leaders are starting to see AI energy demand as an imminent threat to energy security, and are beginning to prioritize AI regulation and increasing energy production capacity. 'In the past few years, AI has gone from an academic pursuit to an industry with trillions of dollars of market capitalisation and venture capital at stake,' according to the International Energy Agency. The vast amount of energy needed to power this growth trajectory means that 'the energy sector is therefore at the heart of one of the most important technological revolutions today.' However, it's not entirely clear exactly how much energy AI is consuming – we just know that it's a lot. The sector is extremely opaque, and governing AI is therefore a tricky situation at present. As of May 2025, a whopping 84 percent of global large language model traffic took place using AI models operating with zero environmental disclosure. And that doesn't just include energy use – AI also has a major impact on water sources, as water is used in cooling systems for data centers as well as thermoelectric plants. But while policy, regulation, and transparency measures remain fuzzy, global industry leaders are already busily integrating machine learning into a broad range of sectors. In the energy sector, it is being used for automation of systems for nuclear plants, and in renewables for more accurate forecasting of energy supply and demand, which will help stabilize grids as variable renewable energy sources like wind and solar become more prevalent in global energy mixes. It's also enhancing energy storage through improved battery design, safety, and management strategies, and even futuristic innovations to give new life to dead batteries. AI is even being used to making coal mining more profitable in China. Clearly, global industry is off to the races to find out how AI can make their business more efficient, lest they be left behind. But a more methodical and structured approach – not to mention clearer policy and regulations – will be necessary to ensure that the technology is being used efficiently and responsibly. 'It is not uncommon for business units to get ahead of the curve by piloting or initiating proof of concepts on their own to keep up with AI advancements, states a recent Forbes report. 'But, when it comes to technology and transformation, rash, siloed decision making rarely produces the intended business outcomes and is often counterproductive.' Instead, more transparency and standardization will be critical to make sure that industry leaders aren't wasting money and resources chasing down the same pathways – or exposing our energy systems to cyberattack. Smart tech needs to work hand-in-hand with IT to make sure that AI innovations are based in good data management and cybersecurity. 'The investments needed to build that IT foundation, and ultimately to scale the [operational technology] and analytics that sit on top of it, will likely transcend business units and functional silos—and because of that, companies could need a structured way to think about them,' the Forbes report went on to say. On the energy-production side of the equation, the public sector is facing similar challenges. The United States Department of Energy (DoE) has acknowledged that AI could be invaluable in managing smart grids capable of handling increased flows of variable energies like wind and solar, but introduces significant risks if deployed 'naïvely. By Haley Zaremba for More Top Reads From this article on Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
