Energy Transfer (ET) is off to a strong start in 2023, with shares up over 18% year-to-date following a robust first-quarter performance. The master limited partnership (MLP) has raised its full-year guidance, reflecting increased confidence in its growth trajectory and operational efficiency. Notably, EBITDA surged 20% year-over-year to $4.94 billion, significantly exceeding management’s expectations, while distributable cash flow rose 17% to $2.7 billion.
The company’s strategy includes ramping up capital expenditures from $5.5 billion to a new range of $5.5 billion to $5.9 billion, driven by a healthy project backlog and long-term contracts. With a 6.6% yield and plans for a 3% to 5% distribution increase, Energy Transfer remains an attractive investment in the midstream sector, especially given its forward enterprise-value-to-EBITDA multiple of just 8.7, well below peers like Enterprise Products Partners.
For market professionals, Energy Transfer’s combination of strong growth potential, solid cash flow coverage, and attractive valuation underscores its status as a compelling buy in the current environment.
Source: fool.com