Energy Transfer’s Enhanced Profits through Acquisition and Organic Expansion Projects

According to the latest information, Energy Transfer (ET) is set to benefit significantly from the acquisition of NuStar by its affiliate Sunoco. ET holds the position of general partner, incentive distribution rights holder, and 21% owner of Sunoco. This transaction will result in ET recording a portion of Sunoco’s higher earnings in their financial results, as well as receiving increased cash distributions due to Sunoco’s recent decision to raise its payout by 4%. This acquisition is anticipated to boost ET’s adjusted EBITDA to a range of $15 billion – $15.3 billion in 2024, representing a 9.5%-11.7% increase from the previous range of $14.5 billion – $14.8 billion. Additionally, ET has approved several organic expansion projects, which include constructing eight 10-megawatt natural gas power-generating facilities and de-bottlenecking its NGL pipelines from the Permian Basin to Mont Belvieu, amongst others. As a result of these projects, ET’s growth capital spending is expected to rise to approximately $2.9 billion in 2024, compared to the earlier range of $2.4 billion – $2.6 billion. Furthermore, ET’s high yield and distribution growth of 3% to 5% annually continue to look promising, with the latest distribution representing a 3.3% increase from the previous year’s level. Before investing in ET, it’s essential to consider this information alongside other factors. However, the Motley Fool Stock Advisor analyst team has identified ten potential stocks for investors to consider, and ET did not make the list. Nonetheless, Stock Advisor offers investors a straightforward guide to successful investment strategies, featuring routine updates from analysts and two new stock recommendations every month. Since 2002, the Stock Advisor service has quadrupled the return of the S&P 500*. Investors can learn more about the service via the provided link. *Stock Advisor returns as of May 6, 2024