- Energy Transfer has achieved a meaningful reduction in leverage in recent quarters.
- ET’s acquisition of Crestwood is expected to generate operational efficiencies and commercial synergies in key basins.
- Enbridge’s acquisition of natural gas distribution companies from Dominion Energy raises concerns about increased debt levels, but also brings diversification benefits.
Enbridge Inc. (ENB) and Energy Transfer LP (NYSE:ET) are prominent players in the midstream sector known for their robust dividend yields and reliance on long-term contracted revenues from pipelines, minimizing direct exposure to volatile commodity prices. Both companies have been addressing concerns about leverage, with ET notably reducing its debt to achieve a lower leverage ratio, and receiving credit rating upgrades as a result.
ET’s acquisition of Crestwood is further anticipated to bolster operational efficiencies and generate additional commercial synergies, particularly in key basins like the Permian and Williston. In my view, this acquisition enhances the long-term investment thesis for ET and should contribute meaningfully to growing distributable cash flow.
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