Analysis of Energy Transfer's Dividend Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Source: Fool
- Stable Dividend Growth: Energy Transfer has consistently increased its dividend every quarter from 2022 to 2025, demonstrating strong dividend growth capabilities with a coverage ratio of 1.8x, attracting numerous income-focused investors.
- Ambitious Investment Plans: The company plans to invest billions in capital over the coming years, expecting annual dividend growth of 3% to 5%, which, combined with a 7% yield, could provide investors with approximately 10% long-term returns.
- Historical Risk Warning: Despite the current positive dividend growth, the company cut its dividend in half during the energy downturn of 2020 due to the pandemic, which may affect investor confidence due to this historical precedent.
- Competitor Analysis: Compared to other midstream companies, Energy Transfer's dividend track record is less impressive than that of Enterprise Products Partners (EPD), which has achieved 27 consecutive annual increases and maintains a 6% yield, making it a more attractive option for conservative investors.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 18.840
Low
17.00
Averages
20.65
High
23.00
Current: 18.840
Low
17.00
Averages
20.65
High
23.00
About ET
Energy Transfer LP owns and operates a diversified portfolios of energy assets in the United States, with more than 140,000 miles of pipeline and associated energy infrastructure. The Company’s strategic network spans 44 states with assets in all of the major United States production basins. Its core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The Company’s segments include intrastate transportation and storage, interstate transportation and storage, midstream, NGL and refined products transportation and services, crude oil transportation and services, investment in Sunoco LP, investment in USA Compression Partners, LP (USAC), and all other. It also owns Lake Charles LNG Company, LLC, its wholly owned subsidiary, which owns an LNG import terminal and regasification facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
North Dakota Judge Finalizes $345M Judgment Against Greenpeace Over Pipeline Protests
- Judgment Outcome: A North Dakota judge has finalized a $345 million judgment against Greenpeace, reflecting the court's stance on Energy Transfer's position in the Dakota Access pipeline protests, despite the initial jury award of $667 million being nearly halved.
- Legal Action: Greenpeace has announced plans to seek a new trial and may appeal to the North Dakota Supreme Court, labeling Energy Transfer's lawsuit as a blatant attempt to silence free speech, indicating strong opposition to the legal proceedings.
- Pipeline Background: Since its completion in 2017, the Dakota Access pipeline has transported approximately 40% of the oil produced in North Dakota's Bakken region, although its construction faced fierce protests from environmental and tribal groups who argued it would poison local water supplies and exacerbate climate change.
- Industry Impact: This ruling could positively affect Energy Transfer's operations, reinforcing its position in the midstream sector, while also potentially sparking further legal disputes regarding the balance between environmental protection and energy development.
See More
Hyperscalers Plan to Invest Over $650 Billion in AI Infrastructure
- Massive Investment: The four largest hyperscalers are set to invest over $650 billion in AI infrastructure in 2023, reflecting strong confidence in AI technology and anticipated market demand.
- Chipmakers Benefit: Nvidia, as the primary GPU supplier for AI workloads, solidifies its market position with its CUDA software platform, which is expected to yield significant gains from the expansion of AI infrastructure, driving future growth.
- Cloud Giants Integrate AI: Companies like Alphabet, Amazon, and Microsoft are embedding AI into their core operations, accelerating cloud revenue growth, indicating that AI will be a key driver of future business development.
- Rising Energy Demand: With the proliferation of AI technology, energy companies like Energy Transfer are engaging in high-return projects to meet the energy needs of AI data centers, showcasing the impact of AI infrastructure development on the energy sector.
See More
Surge in AI Infrastructure Spending
- Massive Investment Plans: The four largest hyperscalers are set to invest over $650 billion this year in AI infrastructure, which will drive demand for related chip and memory manufacturers, significantly boosting their revenues and market shares.
- Nvidia's Market Leadership: Nvidia's GPUs serve as the primary drivers for AI workloads, and its CUDA software platform provides robust support for foundational AI code, solidifying its competitive edge in AI training and inference, which is expected to continue propelling the company's performance growth.
- Tight DRAM Market Supply: With the surge in demand for high bandwidth memory (HBM), Micron Technology, as one of the major DRAM manufacturers, is reducing business cyclicality by locking in long-term HBM contracts, which is expected to lead to sustained increases in revenue and gross margins.
- Energy Transition Opportunities: Energy Transfer, with its natural gas assets in the Permian Basin, is actively engaging in high-return projects related to AI data centers, and is expected to benefit from providing stable energy supplies amid the rapid expansion of AI infrastructure.
See More
Energy Transfer's Growth Accelerates Amid Rising Demand
- Earnings Growth Outlook: Energy Transfer expects its adjusted EBITDA for 2026 to be between $17.5 billion and $17.9 billion, reflecting a year-over-year growth of 9.2% to 11.7%, indicating a significant acceleration in earnings growth driven by rising oil prices and completed expansion projects.
- Expansion Project Progress: The company has completed its Nederland Flexport NGL expansion and anticipates finishing the Mustang Draw I & II plants and phase I of the Hugh Brinson Pipeline in 2026, which will enhance its competitive position and meet the increasing energy demand.
- Capital Investment Plans: Energy Transfer plans to invest between $5 billion and $5.5 billion in growth capital projects this year, which will support the implementation of several expansion projects and lay the groundwork for future revenue growth.
- High-Yield Distribution: With a current distribution yield of 7.2%, the company aims to increase this payout by 3% to 5% annually, which is likely to attract more investor interest in its high return potential, especially following the completion of expansion projects that are expected to boost total returns.
See More
Energy Transfer Poised for Accelerated Growth in 2026
- Earnings Growth Outlook: Energy Transfer expects adjusted EBITDA to range between $17.5 billion and $17.9 billion in 2026, reflecting a year-over-year growth of 9.2% to 11.7%, a significant acceleration from last year's 3.2% growth rate, indicating strong recovery potential amid rising oil prices.
- Expansion Project Progress: The company completed its Nederland Flexport NGL expansion and anticipates finishing the Mustang Draw I & II plants and phase I of the Hugh Brinson Pipeline in 2026, enhancing its competitive position and service capabilities in the energy sector.
- Capital Investment Plans: Energy Transfer plans to invest between $5 billion and $5.5 billion in growth capital projects this year, which will fund expansions entering service this year and ensure sustained growth in the coming years.
- High-Yield Distribution Strategy: The company aims to increase its distribution payout by 3% to 5% annually, with a current yield of 7.2%, which is likely to attract more investor interest and further drive stock price appreciation.
See More
Natural Gas Demand Fuels Pipeline Stock Growth
- Energy Transition Opportunity: With surging global electricity demand, natural gas demand continues to rise, prompting Energy Transfer to invest at least $5 billion in expansion projects by 2026, which is expected to drive earnings growth of about 10% and support annual dividend increases of 3% to 5%.
- Infrastructure Project Progress: Energy Transfer is constructing multiple natural gas infrastructure projects, including the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Transwestern Pipeline expansion, both expected to enter commercial service by 2030, providing strong growth visibility.
- Kinder Morgan's Market Leadership: As the operator of the largest natural gas infrastructure network in the U.S., Kinder Morgan transports 40% of the nation's natural gas and has secured $10 billion in expansion projects, further enhancing its growth outlook while expecting mid-single-digit earnings growth this year.
- High Dividend Yield Potential: The surge in natural gas demand will drive new pipeline projects for Energy Transfer and Kinder Morgan, enabling them to grow future cash flows and continue increasing their high-yield dividends, potentially turning a $150 investment into a growing income stream and larger future returns.
See More
North Dakota Judge Finalizes $345M Judgment Against Greenpeace Over Pipeline Protests
- Judgment Outcome: A North Dakota judge has finalized a $345 million judgment against Greenpeace, reflecting the court's stance on Energy Transfer's position in the Dakota Access pipeline protests, despite the initial jury award of $667 million being nearly halved.
- Legal Action: Greenpeace has announced plans to seek a new trial and may appeal to the North Dakota Supreme Court, labeling Energy Transfer's lawsuit as a blatant attempt to silence free speech, indicating strong opposition to the legal proceedings.
- Pipeline Background: Since its completion in 2017, the Dakota Access pipeline has transported approximately 40% of the oil produced in North Dakota's Bakken region, although its construction faced fierce protests from environmental and tribal groups who argued it would poison local water supplies and exacerbate climate change.
- Industry Impact: This ruling could positively affect Energy Transfer's operations, reinforcing its position in the midstream sector, while also potentially sparking further legal disputes regarding the balance between environmental protection and energy development.
See More
Hyperscalers Plan to Invest Over $650 Billion in AI Infrastructure
- Massive Investment: The four largest hyperscalers are set to invest over $650 billion in AI infrastructure in 2023, reflecting strong confidence in AI technology and anticipated market demand.
- Chipmakers Benefit: Nvidia, as the primary GPU supplier for AI workloads, solidifies its market position with its CUDA software platform, which is expected to yield significant gains from the expansion of AI infrastructure, driving future growth.
- Cloud Giants Integrate AI: Companies like Alphabet, Amazon, and Microsoft are embedding AI into their core operations, accelerating cloud revenue growth, indicating that AI will be a key driver of future business development.
- Rising Energy Demand: With the proliferation of AI technology, energy companies like Energy Transfer are engaging in high-return projects to meet the energy needs of AI data centers, showcasing the impact of AI infrastructure development on the energy sector.
See More
Surge in AI Infrastructure Spending
- Massive Investment Plans: The four largest hyperscalers are set to invest over $650 billion this year in AI infrastructure, which will drive demand for related chip and memory manufacturers, significantly boosting their revenues and market shares.
- Nvidia's Market Leadership: Nvidia's GPUs serve as the primary drivers for AI workloads, and its CUDA software platform provides robust support for foundational AI code, solidifying its competitive edge in AI training and inference, which is expected to continue propelling the company's performance growth.
- Tight DRAM Market Supply: With the surge in demand for high bandwidth memory (HBM), Micron Technology, as one of the major DRAM manufacturers, is reducing business cyclicality by locking in long-term HBM contracts, which is expected to lead to sustained increases in revenue and gross margins.
- Energy Transition Opportunities: Energy Transfer, with its natural gas assets in the Permian Basin, is actively engaging in high-return projects related to AI data centers, and is expected to benefit from providing stable energy supplies amid the rapid expansion of AI infrastructure.
See More
Energy Transfer's Growth Accelerates Amid Rising Demand
- Earnings Growth Outlook: Energy Transfer expects its adjusted EBITDA for 2026 to be between $17.5 billion and $17.9 billion, reflecting a year-over-year growth of 9.2% to 11.7%, indicating a significant acceleration in earnings growth driven by rising oil prices and completed expansion projects.
- Expansion Project Progress: The company has completed its Nederland Flexport NGL expansion and anticipates finishing the Mustang Draw I & II plants and phase I of the Hugh Brinson Pipeline in 2026, which will enhance its competitive position and meet the increasing energy demand.
- Capital Investment Plans: Energy Transfer plans to invest between $5 billion and $5.5 billion in growth capital projects this year, which will support the implementation of several expansion projects and lay the groundwork for future revenue growth.
- High-Yield Distribution: With a current distribution yield of 7.2%, the company aims to increase this payout by 3% to 5% annually, which is likely to attract more investor interest in its high return potential, especially following the completion of expansion projects that are expected to boost total returns.
See More
Energy Transfer Poised for Accelerated Growth in 2026
- Earnings Growth Outlook: Energy Transfer expects adjusted EBITDA to range between $17.5 billion and $17.9 billion in 2026, reflecting a year-over-year growth of 9.2% to 11.7%, a significant acceleration from last year's 3.2% growth rate, indicating strong recovery potential amid rising oil prices.
- Expansion Project Progress: The company completed its Nederland Flexport NGL expansion and anticipates finishing the Mustang Draw I & II plants and phase I of the Hugh Brinson Pipeline in 2026, enhancing its competitive position and service capabilities in the energy sector.
- Capital Investment Plans: Energy Transfer plans to invest between $5 billion and $5.5 billion in growth capital projects this year, which will fund expansions entering service this year and ensure sustained growth in the coming years.
- High-Yield Distribution Strategy: The company aims to increase its distribution payout by 3% to 5% annually, with a current yield of 7.2%, which is likely to attract more investor interest and further drive stock price appreciation.
See More
Natural Gas Demand Fuels Pipeline Stock Growth
- Energy Transition Opportunity: With surging global electricity demand, natural gas demand continues to rise, prompting Energy Transfer to invest at least $5 billion in expansion projects by 2026, which is expected to drive earnings growth of about 10% and support annual dividend increases of 3% to 5%.
- Infrastructure Project Progress: Energy Transfer is constructing multiple natural gas infrastructure projects, including the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Transwestern Pipeline expansion, both expected to enter commercial service by 2030, providing strong growth visibility.
- Kinder Morgan's Market Leadership: As the operator of the largest natural gas infrastructure network in the U.S., Kinder Morgan transports 40% of the nation's natural gas and has secured $10 billion in expansion projects, further enhancing its growth outlook while expecting mid-single-digit earnings growth this year.
- High Dividend Yield Potential: The surge in natural gas demand will drive new pipeline projects for Energy Transfer and Kinder Morgan, enabling them to grow future cash flows and continue increasing their high-yield dividends, potentially turning a $150 investment into a growing income stream and larger future returns.
See More
