Introduction#
Energy Transfer LP (ET has recently underscored its strategic pivot toward expanding its liquefied natural gas (LNG) footprint, a move that aligns with rising global demand for cleaner energy solutions. The company’s focus on LNG infrastructure growth, particularly through the Lake Charles LNG project, combined with strategic partnerships with industry leaders like Chevron and Kyushu Electric, marks a significant development in its corporate trajectory. Alongside these operational advances, Energy Transfer LP's 2024 financial performance reveals a strong foundation supporting its ambitious expansion.
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Recent Financial Performance Highlights#
In 2024, Energy Transfer reported revenue of $82.67 billion, representing a +5.2% increase from 2023’s $78.59 billion, signaling steady top-line growth despite sector volatility. Gross profit rose +13.7% to $15.53 billion, improving the gross profit margin to 18.79%, up from 17.38% the previous year. Operating income also improved by +10.3% to $9.14 billion, reflecting effective cost management and operational efficiency enhancements.
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Net income showed robust growth of +22.3%, reaching $4.81 billion in 2024, contributing to a net margin of 5.82%. This improvement reflects better operating leverage and a favorable market environment for natural gas infrastructure. EBITDA increased +22.6% to $15.4 billion, supporting a healthy EBITDA margin of approximately 18.6%.
The company’s earnings per share (EPS) for the trailing twelve months stands at $1.43, with a price-to-earnings (PE) ratio of 12.26x, indicative of moderate valuation relative to earnings.
Financial Ratios and Capital Structure#
Energy Transfer maintains a current ratio of 1.12x, signaling adequate short-term liquidity to cover current liabilities. Its net debt to EBITDA ratio of 3.86x reflects moderate leverage levels typical for capital-intensive energy infrastructure firms. The company’s return on equity (ROE) of 13.99% and return on invested capital (ROIC) of 7.62% demonstrate disciplined capital allocation and profitability.
The balance sheet shows an increase in total assets to $125.38 billion as of December 2024, driven by significant investments in property, plant, and equipment (PP&E) which rose to $96.02 billion. Correspondingly, total liabilities increased to $78.95 billion, with long-term debt climbing to $60.48 billion, reflecting funding for expansion projects.
LNG Expansion Strategy: A Strategic Growth Catalyst#
Energy Transfer’s LNG strategy focuses on capitalizing on the global shift toward cleaner energy sources by expanding export capacity. Central to this strategy is the Lake Charles LNG project in Louisiana, slated to boost export capacity to about 20 million tonnes per annum (MTPA). This expansion is expected to add approximately $1 billion to $1.5 billion annually to EBITDA, enhancing revenue diversification and growth.
The company has secured about 80% of the Final Investment Decision (FID) threshold through long-term offtake agreements, mitigating market risks and ensuring cash flow stability. Strategic partnerships with Chevron, which committed to supplying an additional 1 MTPA of LNG, and Kyushu Electric, expanding Asian market access, reinforce this position.
The FID for Lake Charles LNG is targeted for late 2025, with operations expected by 2028, aligning with projected global LNG demand growth. This infrastructure development positions Energy Transfer alongside industry leaders such as Cheniere Energy, bolstering its competitive stance in the U.S. LNG export market.
Market and Competitive Landscape#
The LNG export market is experiencing robust growth driven by global energy transition policies and increased natural gas demand in Asia and Europe. The U.S. is projected to peak at approximately 9.8 trillion cubic feet (Tcf) of LNG exports by 2040, with infrastructure expansions like Lake Charles LNG playing a pivotal role.
Energy Transfer’s strategy to secure diversified long-term contracts and expand export capacity differentiates it in a competitive landscape dominated by established players. Its focus on operational excellence and strategic alliances enhances its resilience amid fluctuating energy prices and geopolitical uncertainties.
Dividend Sustainability and Capital Allocation#
Energy Transfer’s dividend yield stands at a compelling 7.4%, with a payout ratio of 94.5%, reflecting a high but consistent distribution policy. The company has maintained stable quarterly dividends, with recent payments around $0.3275 per share.
Capital allocation demonstrates a balance between growth investments and shareholder returns. In 2024, the company invested $4.16 billion in capital expenditures, primarily in LNG infrastructure, while returning $4.62 billion to shareholders through dividends and $3.47 billion via stock repurchases. This approach indicates management’s commitment to sustaining shareholder value alongside funding growth initiatives.
Financial Performance Table (Selected Metrics)#
| Metric | 2024 Value | 2023 Value | % Change |
|---|---|---|---|
| Revenue | $82.67B | $78.59B | +5.20% |
| Gross Profit | $15.53B | $13.66B | +13.70% |
| Operating Income | $9.14B | $8.29B | +10.30% |
| Net Income | $4.81B | $3.94B | +22.30% |
| EBITDA | $15.4B | $12.56B | +22.60% |
| EPS (TTM) | $1.43 | N/A | N/A |
| Dividend Yield | 7.4% | N/A | N/A |
Forward Estimates Table#
| Year | Revenue Estimate | EPS Estimate | EBITDA Estimate |
|---|---|---|---|
| 2025 | $87.16B | $1.44 | $15.95B |
| 2026 | $92.21B | $1.57 | $16.87B |
| 2027 | $94.58B | $1.64 | $17.31B |
| 2028 | $95.94B | $1.56 | $17.56B |
| 2029 | $99.58B | $1.56 | $18.22B |
Source: Analyst consensus estimates as of mid-2025
What Does This Mean for Investors?#
Investors looking at ET should note the company’s strategic commitment to LNG as a long-term growth driver, backed by solid financial health and disciplined capital allocation. The Lake Charles LNG expansion, supported by strong offtake agreements and partnerships, is poised to enhance revenue streams and market positioning.
The company’s stable dividend yield combined with its free cash flow generation (free cash flow of $7.34 billion in 2024) suggests sustainable shareholder returns amid growth investments. Moderate leverage and improving profitability ratios further support confidence in management’s execution capabilities.
Key Takeaways#
- Energy Transfer’s LNG expansion, particularly Lake Charles LNG, is a significant growth catalyst expected to add up to $1.5 billion annually to EBITDA.
- The company’s 2024 financial results show robust growth in revenue, net income, and operating efficiency.
- Strategic partnerships with Chevron and Kyushu Electric diversify market access and strengthen LNG export capabilities.
- Dividend yield of 7.4% and high payout ratio reflect a shareholder-friendly approach balanced with investment in growth.
- Moderate leverage and strong cash flow generation underpin financial flexibility for future expansion.
Conclusion#
Energy Transfer LP is strategically positioned to capitalize on the growing global LNG market through targeted infrastructure expansion and strategic partnerships. The company’s solid 2024 financial performance provides a strong foundation to support these initiatives while maintaining shareholder returns. As global LNG demand continues to rise, ET’s focus on operational excellence and market diversification will be critical for sustaining its competitive edge and unlocking long-term investor value.