30 Stocks That Should Double in 3 Years

24. Energy Transfer (NYSE:ET)

Number of Hedge Fund Holders: 37

Energy Transfer (NYSE:ET) provides energy-related services in the US. It owns and operates natural gas transportation pipelines and storage facilities, and ~12,200 miles of intrastate natural gas transportation pipelines and 20,090 miles of interstate natural gas pipelines. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users.

In Q4 2024, Energy Transfer’s NGL and refined products segment generated adjusted EBITDA of $1.1 billion, which was an increase from the $1.04 billion reported in Q4 2023. This improvement was driven by higher throughput and increased rates across the company’s Gulf Coast and Mariner East pipeline operations. For the full year 2024, Energy Transfer exported a record amount of total NGLs out of its Nederland and Marcus Hook terminals.

The company expects to invest ~$1.4 billion in NGL and refined products in 2025. For instance, the Nederland Flexport expansion is anticipated to begin ethane and propane export service by mid-2025, with ethylene export service expected to commence in Q4 2025. On March 25, UBS maintained a Buy rating on Energy Transfer (NYSE:ET) with a $24 price target.

Patient Capital Management remains optimistic on the company’s long-term pricing opportunities, and stated the following regarding Energy Transfer LP (NYSE:ET) in its Q3 2024 investor letter:

“Energy names disappointed in the quarter following commodity prices lower throughout the period. We took the opportunity to add to our highest conviction ideas. We look to names that have idiosyncratic opportunities and are attractive in a variety of different commodity price environments. Many see risk to energy prices over the next year as supply is expected to outstrip demand by 1.3mb/d even before assuming any incremental OPEC supply comes onto the market. With commodities, consensus is rarely right. We assess companies on through cycle returns and normalized prices. From this perspective, we see a handful of attractive opportunities, including Energy Transfer LP (NYSE:ET), Seadrill (SDRL) and Kosmos (KOS).

Our ownership of Energy Transfer began in 2019 with the belief that the limited supply of new pipelines would provide attractive pricing opportunities over the long-term. At the same time, the company was paying us an attractive dividend (10% yield over the period). So far this investment thesis has largely played out, but we continue to see an attractive long-term setup for the name given our belief that natural gas will be a key ingredient to bridge us to a net carbon neutral world.”