Are Systematic Acquisitions Fueling Energy Transfer's Expansion?

Energy Transfer LP ET is one of the most diversified midstream energy companies in the United States. Its vast network of pipelines, terminals and storage assets positions the firm as a key player in the transportation and distribution of natural gas, crude oil, NGLs and refined products. Energy Transfer continues to expand its operations through a disciplined and systematic approach to acquisitions. 

By acquiring complementary assets with strategic synergies, the company has enhanced its scale, diversified portfolio and created cost efficiencies. Notable transactions include the purchases of WTG Midstream, Lotus Midstream and Crestwood Equity Partners. These acquisitions have expanded ET’s footprint in high-growth basins like the Permian, Williston and Haynesville, while bolstering its natural gas and NGL infrastructure.

These acquisitions not only drive volume growth but also unlock significant operational and commercial synergies, including optimized routing, reduced operating costs and increased connectivity across ET’s network. The resulting efficiencies translate to stronger margins, higher utilization rates and improved customer offerings.

Energy Transfer’s focus on long-term value creation through strategic acquisitions, combined with the scale and integrated platform, makes it a compelling investment for income-seeking and infrastructure-focused investors aiming to benefit from North America’s expanding energy demand.

The firm’s expanding asset base through organic and inorganic initiatives provides stable fee-based cash flows and expands its geographic reach across major producing basins and end markets, supporting consistent earnings and distribution payouts.

How Acquisition Boosts Midstream Companies’ Growth?

Acquisitions enhance oil and gas pipeline operations by expanding network reach, boosting throughput volumes and optimizing asset integration. They provide access to new basins, improve cost efficiencies and create synergies, ultimately strengthening infrastructure scalability and long-term cash flow stability.

Other midstream operators like, Kinder Morgan KMI and Plains All American Pipeline PAA benefit significantly from strategic acquisitions. Kinder Morgan enhances its natural gas network and storage capabilities, while Plains All American Pipeline strengthens crude oil logistics and basin connectivity. Acquisitions improve asset integration, expand market access and increase cash flows, supporting both companies' long-term growth and resilience amid fluctuating commodity markets.

ET’s Price Performance

Units of Energy Transfer have risen 3.7% in the past three months compared with the Zacks Oil and Gas - Production Pipeline - MLB industry’s growth of 3.6%.

ET’s Earnings Estimates Moving North

The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates a year-over-year increase of 16.41% and 6.34%, respectively.

ET Stock Returns Lower Than Its Industry

Energy Transfer’s trailing 12-month return on invested capital (“ROIC”) is 3.26%, down from the industry average of 3.52%. ROIC is a ratio, which indicates how efficiently a company is using its capital to generate profits.

ET’s Zacks Rank

Energy Transfer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research