Core Viewpoint - Energy prices are currently volatile due to geopolitical issues, making the energy sector risky for investors. However, focusing on midstream energy businesses can mitigate commodity risk, with Enterprise Products Partners being highlighted as a strong investment option [1]. Midstream Energy Overview - Midstream energy businesses differ from upstream and downstream sectors as they own infrastructure like pipelines and storage facilities, generating consistent cash flows through fees rather than being directly tied to commodity prices [4]. - Midstream companies typically distribute a significant portion of their cash flows as dividends, which are generally generous in this sector [4]. Investment Comparison - Energy Transfer offers a distribution yield of 7.2%, while Enterprise Products Partners has a yield of 6.9%. Despite the higher yield from Energy Transfer, long-term dividend investors may prefer Enterprise due to its reliability [5][6]. - Enterprise Products Partners has a history of consistent distribution growth, having increased its payouts for 26 consecutive years, contrasting with Energy Transfer, which cut its dividend during the 2020 energy downturn [8][9]. Financial Stability - Enterprise Products Partners maintains a solid financial foundation with an investment-grade rated balance sheet and realistic management goals that are consistently met [9]. - In contrast, other midstream companies like Energy Transfer and Kinder Morgan have faced challenges, including dividend cuts and unmet growth promises during economic downturns [10][11]. Conclusion on Investment Choice - For investors looking for stability and reliability in the energy sector, Enterprise Products Partners is recommended over other midstream options like Energy Transfer or Kinder Morgan, especially for those investing $1,000 or more [12][13].

Core Insights - Pembina Pipeline Corporation (PBA) is a significant player in North America's midstream energy sector, focusing on the transportation, storage, and processing of oil and natural gas [2] - The company has a strong asset base and diversified operations, which support steady cash flow and long-term growth prospects [2][3] Growth Opportunities - Pembina is expanding its NGL export strategy by securing West Coast capacity to access higher-margin markets in Asia, reducing reliance on U.S. demand [5][10] - The integration of Alliance and Aux Sable is expected to yield synergies of C$40-C$65 million, enhancing cash flow and margin expansion [6][10] - Approximately 85-90% of Pembina's EBITDA is derived from fee-based contracts, providing stability against commodity price volatility [8][10] Market Position and Performance - Pembina's strategic footprint and diversified operations position it as a vital intermediary in the energy supply chain, ensuring efficient energy resource flow [2] - The company has shown modest stock performance compared to peers, with a 1.3% gain over the past six months, lagging behind the overall Oil-Energy sector [15] Risks and Challenges - The marketing segment is sensitive to commodity price fluctuations, with management acknowledging potential impacts from weaker global economic conditions [11] - Limited near-term share buyback catalysts may disappoint investors, as management prioritizes debt reduction over capital returns [12] - Increased competition in Montney infrastructure could dilute long-term pricing power and create regulatory challenges [13] - Execution risks associated with the Greenlight Electricity Centre project may affect timelines and returns [14]

Industry Overview - The Zacks Oil and Gas Production and Pipeline industry is essential for meeting global energy demand, driven by economic growth and rising consumption in emerging markets [1] - Despite the shift toward renewables, hydrocarbons remain crucial for transportation, heating, and petrochemical production [1] - Technological advancements like horizontal drilling and enhanced recovery techniques are unlocking new reserves and boosting productivity [1] Pipeline Infrastructure - Pipeline infrastructure is critical for transporting crude oil, natural gas, and refined products efficiently [2] - Stable, fee-based revenue models and long-term contracts provide predictable cash flows for pipeline operators, insulating them from commodity price volatility [2] - The expansion of North American shale production and rising export capacity is expected to increase demand for midstream infrastructure [2] Company Comparisons - Energy Transfer (ET) and Kinder Morgan (KMI) are two of the largest midstream energy companies in North America, operating extensive networks of pipelines and storage facilities [3] - ET offers a diversified midstream infrastructure with stable cash flows and strategic export terminal access, positioning it well for rising U.S. energy production and global demand [4] - KMI has a primarily natural gas-focused midstream network with long-term contracts that provide predictable cash flows, appealing to income-focused investors [5] Earnings Growth Projections - The Zacks Consensus Estimate for ET's earnings per share (EPS) in 2025 and 2026 has increased by 2.86% and 4.26%, respectively [7] - KMI's 2025 EPS estimate has declined by 0.8%, while its 2026 EPS moved up by 2.26% [9] Dividend Yield - ET offers a dividend yield of 7.2%, significantly higher than KMI's 4.04% and the S&P 500's average of 1.58% [8][12] Valuation Metrics - ET is trading at a forward P/E of 12.54X, which is cheaper than KMI's 22.08X and the S&P 500's 22.43X [8][15] - ET's current return on equity (ROE) is 11.47%, while KMI's ROE is 16.6%, both underperforming the S&P 500's ROE of 17.02% [10] Debt to Capital - ET's debt-to-capital ratio is 56.6%, compared to KMI's 48.42%, both higher than the S&P 500's 38.07% [14] Price Performance - ET's units have gained 4.2% in the past month, outperforming KMI's 1.2% gain and the S&P 500's return of 4.4% [16] Conclusion - Energy Transfer is currently favored over Kinder Morgan due to rising earnings estimates, higher dividend yield, better return on equity, and cheaper valuation [20][21]

Core Insights - Williams Companies (WMB) has outperformed Enterprise Products Partners (EPD) in the past year, with a stock increase of 45.5% compared to EPD's 14.3% and the industry's 33.4% growth [1][3]. Company Performance - WMB is expanding its midstream operations through well-planned infrastructure projects like the Southeast Energy Connector and the Power Express Pipeline, which are either operational or in advanced stages [4]. - The Socrates project is a key initiative for WMB, designed to supply natural gas power to data centers, with a secured 10-year contract ensuring predictable income [5]. - WMB's projects are fully contracted before completion, reducing financial risk and ensuring stable cash flows [5]. Financial Strength - WMB has received credit upgrades, with S&P raising its rating to BBB+ and Moody's providing a positive outlook, reflecting strong profit margins and a solid business outlook [9][10]. - In contrast, EPD has not received recent upgrades or improved outlooks from credit agencies, indicating that WMB is currently viewed as financially stronger [10]. Valuation Metrics - WMB is trading at a trailing 12-month EV/EBITDA of 17.59x, which is a premium compared to the industry average of 13.95x and EPD's 10.03x [11]. - Despite WMB's positive long-term outlook, uncertainties in the energy business environment may affect investment decisions [12]. Earnings Estimates - EPD's outlook is less favorable, with its projects focused on gathering and processing fuel, which will take longer to generate profits compared to WMB [13]. - EPD has experienced downward revisions in earnings estimates for 2025 and 2026, indicating potential challenges ahead [13].

First-Quarter 2025 Review May 7, 2025 Forward-Looking Statements and Ownership Structure This presentation contains forward-looking statements. Western Midstream Partners, LP ("WES") believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this presentation. These factors inc ...