Cheniere-Natural Gas Demand to Surge: Top 3 Stocks and ETFs to Consider

Industry Overview - The natural gas and liquefied natural gas (LNG) industry is recovering after several challenging years and is expected to sustain growth into 2025, driven by increasing demand and limited supply [1] - Industrial demand for natural gas is rising globally as industries seek to reduce emissions, which will further boost demand as infrastructure improves [1] LNG Price Forecast - The EIA projects LNG prices to average $3.00 in 2025, which is approximately 36% higher than the 2024 average, with U.S. exports expected to increase by 17% [2] - Key projects like Plaquemines LNG Phase 1 and Cheniere's Corpus Christi Phase 3 are anticipated to contribute significantly to new capacity [2] Cheniere Energy Insights - Cheniere Energy, the largest U.S. natural gas exporter, is projected to grow revenue by nearly 20% in 2025, despite expected year-over-year earnings declines due to capital spending [3] - The company is expected to benefit from increased capacity and improved earnings post-completion of major projects [3][4] Capital Returns and Financial Health - Cheniere's capital return outlook is strong, with reliable dividends and significant share repurchases, which reduced the average diluted share count by 6.2% in Q3 [4] - The company maintains a long-term debt leverage of 2.4x, supported by improving cash flow and a 3.65% increase in equity [4] Kinder Morgan Positioning - Kinder Morgan is well-positioned for the anticipated LNG boom in 2025, acting as a middleman between U.S. natural gas producers and export markets [6] - The company operates approximately 79,000 miles of pipelines and its revenue is primarily driven by the volume of gas transported rather than LNG prices [6] Analyst Sentiment and Stock Performance - Analysts have a Moderate Buy rating on Cheniere, with price targets for 2025 being revised upwards, indicating a potential upside of 35% from current levels [5] - Kinder Morgan's stock has risen over 30% in the past year, with analysts projecting further gains towards the mid-$ 30s [7] Alerian MLP ETF Overview - The Alerian MLP ETF targets U.S. LNG middlemen and offers a high dividend yield of over 7.5% at the start of 2025, with expectations for growing distributions and share buybacks [8] - The ETF's technical action shows promising trends, with potential resistance levels likely to be broken in early 2025 [9]