© Reuters. Energy Transfer is a Buy Even After its Recent Run Up
The price of Energy Transfer’s (ET) MLP units has been heading skywards this year on the back of increasing demand for its and natural gas liquids (NGL) transportation services. And the potential benefits of its forthcoming acquisition of Enable Midstream (NYSE:) have also contributed to investors’ positive sentiment. So, we think it is wise to bet on the MLP now. Read on. Energy Transfer LP (NYSE:) has come a long way from its beginnings as a small intrastate natural gas pipeline operator to now one of the largest and most diversified midstream energy companies with 90,000 miles of pipeline. Its master limited partnership (MLP) units have advanced more than 60% so far this year to close yesterday’s trading session at $10.01. ET is the parent of two other MLPs—Sunoco LP (SUN) and USA Compression Partners, LP (NYSE:).
To further diversify its business, ET is weighing acquisitions in the booming chemicals business. Furthermore, the company is expected to gain roughly $2.4 billion from Winter Storm Uri, which knocked out power and halted the distribution of natural gas in Texas, and is thus expected to be one of the biggest winners from the storm among a group of natural gas suppliers and pipeline companies.
With increasing demand for its products and services, ET’s value is expected to continue heading north in the coming months.
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