This Texas-Based Company Could Be a Strong Buy for Energy Investors

Core Insights - Energy Transfer is one of the largest energy midstream companies in the U.S., with a vast network of 144,000 miles of pipelines and significant storage and export terminal capacity [1] Financial Performance - The company generated nearly $4.3 billion in distributable cash flow during the first half of 2025, distributing almost $2.3 billion to investors, resulting in a solid payout ratio and a 7.8% yield on its distribution [5] - Energy Transfer has a strong balance sheet, with a leverage ratio in the lower half of its target range of 4.0-4.5 times, marking its strongest financial position in history [6] Growth Strategy - The company is investing $5 billion into growth capital projects this year, which are expected to accelerate earnings growth as they come online over the next year [7] - Notable expansion projects include the Hugh Brinson Pipeline, a 400-mile gas pipeline with a total cost of $2.7 billion, expected to come online in phases by the end of 2026 and early 2027 [8] - Additional expansions include increasing natural gas liquids (NGL) capacity at its terminal in Nederland, TX, constructing another NGL fractionator in Mont Belvieu, TX, and building two gas processing plants in the Permian Basin, with commercial service expected by 2026 [10]