Stock of the Day

August 16, 2024

Energy Transfer (ET)

$19.40
-$0.55 (-2.7%)
Market Cap: $66.53B

About Energy Transfer

Energy Transfer LP provides energy-related services. The company owns and operates natural gas transportation pipeline, and natural gas storage facilities in Texas and Oklahoma; and approximately 20,090 miles of interstate natural gas pipeline. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. In addition, the company owns and operates natural gas gathering pipelines, processing plant, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, Montana, North Dakota, Wyoming, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; and transports and supplies water to natural gas producer in Pennsylvania. Further, it owns 5,700 miles of natural gas liquid (NGL) pipeline; NGL fractionation facilities; NGL storage facilities; and other NGL storage assets and terminal. Additionally, the company provides crude oil transportation, terminalling, acquisition, and marketing activities; owns and operates approximately 14,500 miles of crude oil trunk and gathering pipelines in the Southwest, Midcontinent, and Midwest United States; and sells and distributes gasoline, middle distillate, and motor fuels and other petroleum products. It also offers natural gas compression services; carbon dioxide and hydrogen sulfide removal services; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalty, and generate electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. Energy Transfer LP was founded in 1996 and is headquartered in Dallas, Texas.

Energy Transfer Bull Case

Here are some ways that investors could benefit from investing in Energy Transfer LP:

  • Energy Transfer LP has recently increased its quarterly dividend to $0.325, which indicates a commitment to returning value to shareholders and can attract income-focused investors.
  • The current stock price is approximately $20.03, reflecting a recent increase of 1%. This upward movement can signal positive market sentiment and potential for further gains.
  • Analysts have a consensus rating of "Moderate Buy" for Energy Transfer LP, with a price target averaging around $21.18, suggesting that there is room for price appreciation based on future performance expectations.
  • The company has a solid market capitalization of $68.42 billion, which provides stability and the ability to invest in growth opportunities, making it a potentially safer investment in the energy sector.
  • Energy Transfer LP reported a return on equity of 12.38%, indicating effective management and profitability, which can be appealing to investors looking for companies with strong financial performance.

Energy Transfer Bear Case

Investors should be bearish about investing in Energy Transfer LP for these reasons:

  • The company reported earnings per share of $0.29, missing analysts' consensus estimate of $0.35, which may raise concerns about its ability to meet growth expectations.
  • Energy Transfer LP has a debt-to-equity ratio of 1.40, indicating a higher level of debt compared to equity. This can pose risks, especially in volatile market conditions, as it may affect financial stability.
  • The stock has a relatively high beta of 1.69, suggesting that it is more volatile than the market. This could lead to larger price swings, which may not be suitable for risk-averse investors.
  • Despite recent positive movements, the stock's performance has been inconsistent, with a twelve-month low of $14.09, indicating potential risks associated with price fluctuations.
  • Institutional investors and hedge funds own 38.22% of the company's stock, which can lead to increased volatility if these large investors decide to sell their positions.

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