The units of natural gas pipeline operator
Energy Transfer Partners LP
) soared to a 52-week high of $51.00 on Monday, May 20, 2013,
buoyed by a slew of positive developments. The closing price of
the partnership as of the said date was also $51.00, representing
an impressive year-to-date return of 13.97%. Additionally, Energy
Transfer - with a market cap of $18.39 billion - boasts of a
long-term expected earnings growth rate of 7.55%.
ENBRIDGE ENERGY (EEQ): Free Stock Analysis
ENERGY TRAN PTR (ETP): Free Stock Analysis
KINDER MORG MGT (KMR): Free Stock Analysis
SUMMIT MIDSTRM (SMLP): Free Stock Analysis
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The partnership delivered positive earnings surprise of 33.33% in
the recently reported first quarter. During the period, Energy
Transfers' top and bottom lines surpassed their respective Zacks
Consensus Estimate. The partnership's higher natural gas
production and transportation sales complemented the results.
Energy Transfer is well positioned to compete in the natural gas
midstream and transportation & storage businesses with its
geographically diverse asset mix. The partnership has a
significant market presence in each of its operating areas, which
are located in major natural gas-producing regions of the U.S.
Additionally, Energy Transfer is ideally situated to benefit from
the increasing production from unconventional sources of natural
gas. With the largest intrastate system in Texas and expanding
interstate assets, the partnership is connected to nearly every
natural gas shale play in North America, including the
Haynesville, Fayetteville and Barnett shales.
However, acquisitions have historically played a major role in
the partnership's growth profile and are expected to remain
significant in the future as well. Energy Transfer may find it
difficult to complete accretive transactions in the future, which
could negatively impact its growth rate.
This accounts for Energy Transfers' current Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
Meanwhile, pipeline operators like
Enbridge Energy Management LLC
Summit Midstream Partners LP
Kinder Morgan Management LLC
) offer more value and are worth buying now. All these firms
sport a Zacks Rank #2 (Buy).