Prognosis: These 3 Shares Set to Surpass Enterprise Products Partners' Value Within the Following Half Decade
In the dynamic world of midstream energy infrastructure, three companies - Energy Transfer, Kinder Morgan, and Oneok - are making waves with their ambitious growth strategies, potentially outpacing Enterprise Products Partners (EPD) in the near future.
Energy Transfer, a diversified business with a leading natural gas liquids export business, currently expects to invest $5 billion into growth capital projects this year, up from $3 billion last year. The company also has several expansion projects under development, including its large-scale Lake Charles LNG project.
Kinder Morgan, another major player, has robust organic growth prospects with $8.8 billion of secured expansion projects on track to enter commercial service through 2030. The company recently acquired a gas gathering and processing system in the Bakken for $640 million, aiming for further growth in the coming years. Kinder Morgan expects to pursue over 5 Bcf/d of projects related to increased gas demand from the U.S. power sector and additional LNG feedgas opportunities.
Oneok, the smallest of the trio, is growing rapidly. In 2022, the company acquired Medallion Midstream and a 43% interest in EnLink Midstream for $5.9 billion in cash, and the remaining interest in EnLink in a $4.3 billion all-stock deal. In a landmark move in 2023, Oneok acquired Magellan Midstream Partners in a $18.8 billion deal. Despite its current market cap of just over $50 billion, Oneok's strategy is to build a leading integrated energy midstream company, showing no signs of slowing.
In comparison, EPD, with a market cap of $67 billion, has been a steady grower over the years, increasing its distribution to investors every single year for a quarter of a century. However, its capital spending level is expected to decline from a range of $4 billion to $4.5 billion this year to a range of $2 billion to $2.5 billion next year.
The combined market cap of Energy Transfer, Kinder Morgan, and Oneok surpasses that of EPD, indicating a shift in the midstream energy landscape. While specific predictions comparing these companies by their growth prospects relative to EPD are scarce, analysts often highlight smaller or mid-size MLPs with more exposure to growth segments such as natural gas liquids, renewable energy infrastructure, or those benefiting from new infrastructure projects as potential contenders.
As the energy sector continues to evolve, it will be interesting to see how these companies navigate the challenges and opportunities ahead. For detailed forecasts and specialized energy sector equity research reports, investors may want to consult investment analysis focused on MLPs.
- Investors who pursue MLPs may find potential contenders in the midstream energy landscape, as smaller or mid-size MLPs with exposure to growth segments like natural gas liquids, renewable energy infrastructure, or those benefiting from new infrastructure projects could outpace Enterprise Products Partners (EPD).
- In the dynamic world of midstream energy infrastructure, companies like Energy Transfer, Kinder Morgan, and Oneok, which are making significant investments in growth capital projects, could potentially overtake EPD in the near future.
- The strategy of Oneok, which involves acquiring other companies and aiming for further growth, shows no signs of slowing, positioning the company as a potential competitor to EPD in terms of finance and business growth.
