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Energy Transfer Hikes Distribution as Enterprise Products Scales Back Capex

Income seekers weigh ET's AI-linked expansion against EPD's cash-conserving approach.

Overview

  • Energy Transfer raised its annual distribution to $1.34, implying roughly a 7.4% forward yield.
  • ET reported 1.7x distributable cash flow coverage last quarter and highlighted a high share of take-or-pay contracts.
  • Management plans $5.0 billion to $5.5 billion of 2026 growth capex to expand gas infrastructure tied to AI data centers and power demand.
  • Enterprise Products Partners increased its payout for a 27th consecutive year in 2025 and currently yields about 6.3%, with 1.8x coverage in the fourth quarter.
  • EPD will trim 2026 growth capex to $2.5–$2.9 billion from 2025’s $4.4 billion, targeting discretionary cash for debt reduction, buybacks or acquisitions, and expects double-digit EBITDA and cash-flow growth in 2027 as projects ramp.