Energy Transfer (ET) is regarded as a reliable income investment due to its extensive infrastructure network and stable business model. The company operates a pipeline network spanning over 135,000 miles across 44 states, generating steady revenue through a “toll road” model by charging upstream and downstream energy companies for transportation services. This model helps insulate the company from commodity price volatility, ensuring stable cash flow to support dividend payouts as long as customers continue using its pipelines to transport crude oil, natural gas, and refined products.
Currently, ET offers an expected annual dividend of $1.31 per share, yielding 7.2%, with projected 2025 earnings per unit (EPU) of $1.40—sufficient to cover dividend payments. Over the past five years, its stock price has surged 155%, and with dividends reinvested, the total return reaches 293%, significantly outperforming the S&P 500’s 116% gain during the same period.
ET’s strong performance stems from aggressive business expansion. Over the past five years, the company has expanded its pipeline network by more than 45,000 miles through organic growth and acquisitions, including Enable Midstream Partners, Lotus Midstream, Crestwood Energy Partners, and WTG Midstream. From 2019 to 2024, its adjusted EBITDA grew at a compound annual growth rate (CAGR) of 7%.
Looking ahead, ET’s growth will primarily rely on the expansion of liquefied natural gas (LNG) export markets, project execution, and further asset integration. Additionally, a potential Trump administration could bring regulatory relief and pro-energy production policies, though higher tariffs on steel and other materials may increase construction costs.
Analysts expect ET’s adjusted EBITDA to grow steadily from 2024 to 2027. If it maintains a 5% CAGR beyond 2027 while keeping its valuation multiple unchanged, its enterprise value could rise by 11% to $141 billion by 2030. Although ET may not continue to significantly outperform the S&P 500 over the next five years, it could still deliver above-average total returns if it sustains earnings growth and dividend distributions.
