Energy Transfer: Switching To Offense With Enable Midstream Acquisition

Summary

  • The smooth integration of the Enable Midstream acquisition switches my Energy Transfer thesis from a defensive play to a growth play.
  • The acquisition is expected to create $100M of annual synergistic savings and has already contributed to the expansion of its midstream earnings from $288M EBITDA last year to $807M this year.
  • Financial strength is near a peak level with a record-low 4.43x leverage ratio, making the return of dividends to the previous level of $0.305 totally feasible in the next 3 to 5 years.
  • Yet, valuation is at about a 30% discount, creating a large margin of safety and a very asymmetric risk/reward profile.
  • Looking for a portfolio of ideas like this one? Members of Envision Early Retirement get exclusive access to our model portfolio. Learn More »
Alaskan oil pipeline in the north slope region of alaska

kyletperry/iStock via Getty Images

Thesis

I first published my bull thesis on Energy Transfer (NYSE:ET) back in Feb 2022 (remember that was the time the Russian/Ukraine war just broke out). The title of the article “Energy Transfer: Hunker Down And Hedge Up With Its 7% Dividend” pretty much

If you like this analysis, check out Envision Early Retirement to see our other ideas and real portfolios. 

  • Receive actionable and unambiguous ideas across multiple assets.
  • Access our real-money portfolios, trade alerts, and transparent performance reporting.
  • Use our proprietary allocation strategies to isolate and control risks.

We have helped our members not only to beat S&P 500 but also avoid heavy drawdowns despite the extreme volatilities in BOTH the equity AND bond market.

Join for a 100% Risk-Free trial and see if our proven method can help you too.

This article was written by

18K Followers

Envision Research, aka Lucas Ma, has over 20+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management.

He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About ET Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on ET

Related Stocks

SymbolLast Price% Chg
ET
--