This monster energy stock has nearly quadrupled investors' money in five years with steady dividend growth.The ultimate test of safety and reliability for a high-yielding dividend stock is the company's financial health. If the yield is backed by rising cash flows and dividends and the company has the potential to keep growing, it is the kind of dividend stock that can not only fetch you regular income, but also generate solid returns over time. That's what investors in MPLX (MPLX +1.93%) have enjoyed so fa ...

Core Insights - Targa Resources Corp. (TRGP) is a prominent U.S. midstream energy infrastructure company with a market cap of $36.6 billion, primarily involved in the gathering, compressing, treating, processing, and transporting of natural gas and natural gas liquids (NGLs) [1] Stock Performance - TRGP shares have underperformed the broader market, declining 12.2% over the past 52 weeks, while the S&P 500 Index has gained 14.5%. Year-to-date, TRGP is down 4.4%, compared to a 16.5% rise in the S&P 500 [2] - The stock has also underperformed the Energy Select Sector SPDR Fund (XLE), which saw a 3.8% drop over the past 52 weeks and a 5.4% gain year-to-date [3] Performance Analysis - The decline in TRGP's stock price is attributed to weaker-than-expected quarterly performance, concerns regarding rising infrastructure capacity for NGLs, slower growth in upstream production, and market caution on oil prices [4] Earnings Forecast - For the fiscal year ending December 2025, analysts project Targa's EPS to grow 47% year-over-year to $8.44. The company's earnings surprise history is mixed, with one beat and three misses in the last four quarters [5] Analyst Ratings - Among 22 analysts covering TRGP, the consensus rating is a "Strong Buy," with 18 recommending "Strong Buy," one advising "Moderate Buy," and three maintaining a "Hold" rating [5] - The consensus rating has become slightly more bullish compared to two months ago, when there were 17 "Strong Buy" ratings [6] Price Targets - J.P. Morgan analyst Jeremy Tonet reaffirmed an "Overweight" rating on TRGP, slightly increasing the price target to $215 from $214. The mean price target of $204.59 indicates a potential upside of 19.9% from current levels, while the highest price target of $261 suggests a possible rise of up to 53% [6]

Capital Allocation and Returns - Since IPO, the company has returned $61 billion of capital to equity investors via LP distributions and common unit buybacks[9] - Distributions for 3Q 2025 were $0.545 per unit, a 3.8% increase over 3Q 2024[9] - Buybacks in 3Q 2025 totaled $80 million, representing 2.5 million common units[9] - For the 9 months ended September 30, 2025, buybacks amounted to $250 million, representing 8 million common units[9] - Adjusted CFFO Payout Ratio was 58% TTM for 3Q 2025[9] Capital Expenditures and Financial Health - Growth Capital Expenditures are projected to be approximately $4.5 billion in 2025 and between $2.2 billion and $2.5 billion in 2026[9] - Sustaining Capital Expenditures are estimated at approximately $525 million in 2025[9] - The Leverage Ratio was 3.3x as of September 30, 2025[9] - Liquidity stood at $3.6 billion as of September 30, 2025, comprising available credit capacity and unrestricted cash[9] Operational Performance and Growth - The company has $5.1 billion of major capital projects under construction[24] - Natural Gas Processing Plant Inlet Volume has a 10% CAGR[20] - Equivalent Pipeline Transportation Volume has a 8% CAGR[21] - NGL Fractionation Volume has a 8% CAGR[21] - For the 9 months ended 2025, the gross operating margin was $7.3 billion[27]

Core Viewpoint - The article emphasizes the importance of conservative dividend-paying stocks for older investors, highlighting Philip Morris International, PepsiCo, and Enterprise Products Partners as reliable options for generating steady long-term income [1][2]. Group 1: Philip Morris International - Philip Morris International (PMI) is one of the largest tobacco companies, spun off from Altria in 2008, focusing on international markets with higher smoking rates [3]. - Despite declining global smoking rates, PMI's stock has increased nearly 210% since its public debut, with a total return of 608% including reinvested dividends [4]. - PMI has offset declining traditional cigarette shipments by raising prices, cutting costs, and expanding its smoke-free product portfolio, which accounted for 41% of revenue and 42% of gross profit in the latest quarter [5]. - Analysts project PMI's earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 26% from 2024 to 2027, with a forward dividend yield of 3.7% [6]. Group 2: PepsiCo - PepsiCo is a leading beverage and packaged food company, recognized as a Dividend King with 53 consecutive years of dividend increases, currently offering a forward yield of 3.8% [7]. - The company has adapted to health trends by expanding its beverage portfolio with healthier options and updating its packaged food brands [8]. - Over the past decade, PepsiCo's stock has risen 55%, generating a total return of nearly 110%, with analysts expecting an EPS CAGR of nearly 8% from 2024 to 2027 [9]. Group 3: Enterprise Products Partners - Enterprise Products Partners operates over 50,000 miles of pipeline, generating revenue by charging fees to upstream and downstream companies, insulating it from commodity price volatility [10][11]. - As a master limited partnership (MLP), it offers tax advantages and has consistently raised distributions for 28 years, currently providing a high forward yield of 7.2% [12]. - Analysts expect its earnings per unit (EPU) to grow at a steady CAGR of 4% from 2024 to 2027, with the stock appearing attractive at 11 times next year's EPU [13].

Core Viewpoint - APA Corporation is expected to report second-quarter earnings on August 6, with an estimated profit of 45 cents per share and revenues of $2.07 billion, reflecting a significant decline compared to the previous year [1][7]. Group 1: Previous Quarter Performance - In the last reported quarter, APA exceeded consensus estimates with adjusted earnings per share of $1.06, surpassing the Zacks Consensus Estimate of 83 cents, and revenues of $2 billion, which beat the estimate by 37.3% [2]. - The company has had mixed results in the past four quarters, beating estimates in two and missing in the other two, resulting in an average surprise of 7.35% [3]. Group 2: Revenue and Earnings Estimates - The Zacks Consensus Estimate for second-quarter earnings indicates a 61.54% decline year over year, while revenues are expected to decrease by 25.80% compared to the previous year [3]. - Revenues for the upcoming quarter are projected to drop from $2.54 billion in the year-ago quarter, with a 31.4% decline in revenues from core oil, natural gas, and natural gas liquids segments [5]. Group 3: Cost Management - APA's total expenses are anticipated to reach $1.52 billion in the second quarter, down 18.5% from the previous year, with lease operating expenses expected to decrease from $489.6 million to $460 million [6]. - Costs associated with gathering, processing, and transmission are also projected to decline from $121 million to $105.1 million, and the cost of purchased oil and gas is expected to drop from $210 million to $156.9 million [6]. Group 4: Earnings Prediction Model - The Zacks model does not predict a definitive earnings beat for APA this season, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [7][8].

Capital Allocation and Returns - Enterprise returned $59 billion to equity investors since IPO via LP distributions and common unit buybacks[8] - Distributions were $0.545 per unit for 2Q 2025, a 3.8% increase over 2Q 2024[8] - Buybacks in 2Q 2025 totaled $110 million for 3.6 million common units[8] - For the trailing 12 months ended 2Q 2025, buybacks were $309 million for 10 million common units[8] - Adjusted CFFO Payout Ratio was 57% for the trailing 12 months ended 2Q 2025[8] Capital Expenditures and Liquidity - Growth Capital Expenditures are projected to be in the range of $40 billion to $45 billion in 2025 and $20 billion to $25 billion in 2026[8] - Sustaining Capital Expenditures are estimated to be approximately $525 million in 2025[8] - The Leverage Ratio was 31x for the trailing 12 months ended 2Q 2025, with a target ratio of 30x (+/- 025x)[8] - Liquidity stood at $51 billion as of June 30, 2025, comprising available credit capacity and unrestricted cash[8] Operational Performance and Growth - Natural Gas Processing Plant Inlet Volume reached a record 77 Bcf/d[20] - Equivalent Pipeline Transportation Volume reached a record 134 MMBPD[21] - Total Marine Terminal Volumes reached a record 21 MMBPD[22] Gross Operating Margin (GOM) Analysis (2Q 2025 vs 2Q 2024) - Total GOM increased from $2412 million in 2Q 2024 to $2477 million in 2Q 2025[39] - NGL Segment GOM decreased by $28 million[39] - Crude Oil Segment GOM decreased by $14 million[39] - Natural Gas Segment GOM increased by $124 million[39] - Petrochemicals & Refined Products Segment GOM decreased by $38 million[39]

Capital Allocation and Returns - Since IPO, the company has returned $58 billion of capital to equity investors via LP distributions and common unit buybacks[9] - Distributions for 1Q 2025 were $0.535/unit, a 3.9% increase over 1Q 2024[9] - Buybacks in 1Q 2025 totaled $60 million, representing 1.8 million common units[9] - For the trailing 12 months ended 1Q 2025, buybacks amounted to $239 million, representing 8 million common units[9] - The Adjusted CFFO Payout Ratio was 56% for the trailing 12 months ended 1Q 2025[9] Capital Expenditures and Liquidity - Growth Capital Expenditures are projected to range from $40 billion to $45 billion in 2025 and $20 billion to $25 billion in 2026[9] - Sustaining Capital Expenditures are estimated at approximately $525 million in 2025[9] - The Leverage Ratio was 31x for the trailing 12 months ended 1Q 2025, with a target ratio of 30x (+/– 025x)[9] - As of March 31, 2025, liquidity stood at $36 billion, comprising available credit capacity and unrestricted cash[9] Operational Performance and Growth Projects - Natural Gas Processing Plant Inlet Volume reached 77 Bcf/d in 1Q 2025, reflecting a 9% CAGR[20] - Equivalent Pipeline Transportation Volume reached 132 MMBPD in 1Q 2025, reflecting an 8% CAGR[21] - The company has $76 billion of major capital projects under construction, with $6 billion of these projects slated to come online in 2025[24, 27] Gross Operating Margin (GOM) Analysis - Total GOM for 1Q 2025 was $2431 million[41] - NGL Segment GOM for 1Q 2025 was $1418 million, an increase of $78 million compared to 1Q 2024[41, 44] - Crude Oil Segment GOM for 1Q 2025 was $374 million, a decrease of $37 million compared to 1Q 2024[41, 47]

Core Viewpoint - Energy Transfer LP is positioned as a resilient investment opportunity in the midstream energy sector, particularly appealing during economic uncertainty due to its strong fundamentals and high dividend yield [3][4][17]. Company Overview - Energy Transfer LP trades at $15.92, with a 52-week range of $14.60 to $21.45 and a dividend yield of 8.17% [2]. - The company has shown signs of recovery after reaching a 52-week low, closing above its lows on substantial volume [2]. Financial Performance - In 2024, Energy Transfer reported record financial results, with adjusted EBITDA of $15.5 billion (up 13% year-over-year) and distributable cash flow of $8.4 billion (up 10% YoY) [5][6]. - The company’s strong operational volumes across key segments demonstrate its profitability and cash-generating capabilities [6]. Dividend Information - Energy Transfer has an annual dividend of $1.30, with a recent increase in its quarterly payout to $0.3250 per unit, resulting in a dividend yield of approximately 8.41% [7][8]. - The company has shown a 27.86% annualized 3-year dividend growth, indicating management's confidence in future cash flows [7]. Strategic Initiatives - Energy Transfer is diversifying into high-growth areas, including data center power supply and liquefied natural gas (LNG) projects, which are expected to enhance future growth and cash flow stability [9][18]. - The company allocated $5 billion for growth capital expenditure in 2025, focusing on projects anticipated to generate future returns [16]. Analyst Ratings and Price Targets - Analysts maintain a moderate buy consensus rating for Energy Transfer, with an average price target of $22.09, suggesting a potential upside of over 42% from the current price [10][11]. - Prominent analysts have raised their price targets, with Morgan Stanley setting a target of $26 and the Royal Bank of Canada at $23, reflecting confidence in the company's long-term value [12]. Valuation Metrics - As of April 8, the trailing P/E ratio is around 12.07, and the P/B ratio is about 1.34, indicating that the stock may be undervalued relative to its earnings and growth potential [14]. - The company's proactive financial management includes a successful $3.0 billion senior notes offering to refinance existing debt, maintaining a debt-to-equity ratio of 1.42, which aligns with industry standards [15].