Why Energy Transfer Partners is Up to Strong Buy - Analyst Blog

On Jul 10, Zacks Investment Research upgraded natural gas pipeline operator Energy Transfer Partners LP (ETP) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Over the last few years, Energy Transfer Partners − a master limited partnership (MLP) − has been investing significant capital to improve its midstream, NGL transportation and storage services. The partnership is now well positioned to compete in the natural gas midstream, and transportation and storage markets with an asset mix that is dispersed globally. Energy Transfer Partners also has a strong market presence in each of its operating areas located in major U.S. natural gas-producing regions.

Additionally, Energy Transfer Partners is ideally situated to benefit from 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.

Moreover, Energy Transfer Partners' acquisition of gasoline retailer Susser Holdings Corp. (SUSS) will likely be closed by the third quarter of this year. After the purchase, the partnership will be able to significantly expand its existing network of gas stations as Susser Holdings operates more than 600 Stripes and Sac-N-Pac retail stations – selling gasoline, diesel fuel and convenience store items – with a large footprint across Texas, New Mexico and Oklahoma. Hence, we believe that the completion of the acquisition will help Energy Transfer Partners to earn sufficient cash flows for its unit holders.    

Other Stocks to Consider

Apart from Energy Transfer Partners, one can also look at some other favorably ranked players in the oil and gas production pipeline MLP space. These include Zacks Rank #1 Energy Transfer Equity LP (ETE) and Magellan Midstream Partners LP (MMP).

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ENERGY TRAN PTR (ETP): Free Stock Analysis Report
 
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SUSSER HLDGS CP (SUSS): Free Stock Analysis Report
 
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