Energy Transfer Has Lots of Fuel to Grow its 7%-Yielding Dividend in 2025 and Beyond

Fellow Co-CEO Marshal McCrea discussed some of these potential growth projects later in the call. On Warrior, he highlighted that “We’ve made tremendous progress” in securing the commercial contracts needed to make a Final Investment Decision. The company is so confident that it will move forward with this project that it has already locked in an option to purchase the steel needed to construct the pipeline. That project will enable Energy Transfer to use some underutilized capacity, which should enable it to generate a good rate of return for the company.

“We’re very bullish on getting [Lake Charles] LNG to the finish line,” stated McCrea on the call. The company recently signed agreements with contractors to build the facility. It also believes the new administration will be more supportive of LNG export projects, which should enable it to get the permits it needs to move forward. The company still has a lot of work to do. “We’ve got partners we’ll need to bring in, and of course, financing,” stated McCrea on the call. However, he also noted that “we do have a lot of momentum.”

Meanwhile, the company is seeing a meaningful uptick in demand for additional gas pipeline infrastructure to support the expected surge in power demand over the coming years, powered partly by AI data centers. Long noted on the call that: “We have never seen this level of activity from a demand-pull standpoint and these opportunities are truly spread across our natural gas footprint from Arizona to Florida and from Texas to Michigan.” The company believes it’s in the best position to capitalize on this demand because of the strategic location of its pipeline infrastructure.

Energy Transfer has hit the accelerator this year, fueled by acquisitions and expansion projects. Given its robust backlog and extensive pipeline of future expansion opportunities, it has a lot more growth ahead. Those projects should give the MLP plenty of fuel to continue increasing its distribution, which it’s targeting to grow by 3% to 5% per year. That combination of income and growth should help fuel robust total returns for investors. That makes Energy Transfer a compelling opportunity for those comfortable investing in an MLP that sends its investors a Schedule K-1 Federal Tax Form each year.

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Matt DiLallo has positions in Energy Transfer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Energy Transfer Has Lots of Fuel to Grow its 7%-Yielding Dividend in 2025 and Beyond was originally published by The Motley Fool