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Energy Transfer LP ET is trading above its 50-day and 200-day simple moving average (SMA), signaling a bullish trend. The oil and gas midstream firm owns a wide network of pipelines across the United States and is pursuing opportunities to serve growing power loads from new demand centers across its network.
The firm is also a top exporter of liquefied petroleum gas and is working to expand natural gas liquids (NGL) export facilities to meet the rising demand for NGL globally.
ET's SMA Chart 50 and 200-day
Image Source: Zacks Investment Research
The 50-day and 200-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of a stock’s uptrend or downtrend.
The ET stock closed at $19.81 on Jan. 27. In the past year, the company’s shares have gained 36.4% compared with the industry’s 30.1% rally. ET has also outperformed the S&P 500’s growth of 22.8% and the Zacks Oil-Energy sector’s return of 6.8%.
Price Performance (One Year)
Image Source: Zacks Investment Research
Should you consider adding ET to your portfolio only based on positive price movements? Let’s delve deeper and find out factors that can help investors decide whether it is a good entry point to add ET stock to their portfolio.
Contributing Factors to ET Stock’s Performance
Energy Transfer owns more than 130,000 miles of pipelines across the United States and is expanding its operations through organic initiatives and acquisitions. ET’s operations are spread across 44 states. The firm has been making one large accretive acquisition each year since 2021. ET expanded its natural gas pipeline and processing network in the Permian Basin last year through the WTG acquisition.
The majority of Energy Transfer’s revenues are generated from fee-based contracts and are anchored by strong customers. The firm generates nearly 90% of its revenues by charging fees for transportation and storage services it provides to its strong customer base, which significantly lowers its commodity price fluctuation risks. As oil and gas production volumes are rising across the United States, ET will have enough producers to utilize its pipelines for transportation.
Energy Transfer has a well-balanced asset mix that provides strong earnings support. ET’s oil and gas pipelines, gathering and processing, and storage assets are spread in major U.S. basins and growing demand markets.
Energy Transfer has an NGL and Crude oil export capacity of more than 1.1 million barrels per day and 1.9 million barrels, respectively. The firm is planning to increase its export capabilities through the expansion of Marcus Hook and Nederland export terminals. The company’s market share of worldwide NGL exports is around 20%.