Recent earnings showed improved operating margins and strong segment volumes, while the Lake Charles LNG partnership further de-risks growth projects. Favorable industry trends, rising U.S. natural gas demand, and bullish Wall Street ratings reinforce ET's positive outlook and upside potential. DDM analysis shows ET is massively undervalued, offering a large margin of safety even with conservative dividend growth assumptions.

Energy Transfer: Another Strong Quarter And Still Trading At A Discount

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Energy Transfer's strategically positioned and diversified asset base across the United States underpins its growth to meet rising demand. Yet, its below-average return on equity raises some concerns.

Energy Transfer is positioned to benefit from surging energy demand driven by data centers, AI, and digital infrastructure expansion in the U.S. ET's unmatched infrastructure, robust growth projects, and fee-based contracts support rising distributable cash flow and future distribution increases. Despite recent underperformance, ET remains undervalued versus peers, trading at the lowest EBITDA and DCF multiples in its group.

Investors love dividend stocks, especially those with ultra-high yields, because they offer a significant income stream and have substantial total return potential.

Energy Transfer LP (ET) is well positioned to outperform the market, as it exhibits above-average growth in financials.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Energy Transfer (ET -0.03%) will likely be of most interest to income-focused investors given its attractive 7.3% distribution yield. The distribution has been increased every quarter for nearly four years.

Energy Transfer's balance sheet is sound, debt leverage is well-managed, and the cash distribution is well-covered, supporting a stable investment-grade rating. Growth projects in data centers and NGL exports are likely to provide multi-year DCF upside. The Hugh Brinson Pipeline project affords the company another major Permian Basin gateway. My current fair value estimate implies ~25% upside from current prices; In addition, units offer a 7.2% cash distribution yield.