The US is about to enter an unprecedented period of energy demand. After growing slowly over the past 20 years, forecasters expect the country’s electricity demand to increase over the next decade, to grow more than 10 times faster than ten years ago. Many catalysts will provide the energy that increases, including electrical installation of heating and transportation sectors, electric vehicles, and AI data centers.
Natural gas will play an important role in helping to support the expected rise in electricity demand. Forecasters estimate that the country will use an additional 20 billion cubic feet per day (bcf/d) of natural gas by 2030, up from 108 bcf/d last year, and this is before adding a 10 bcf/d increase in natural gas demand. from data centers. This prediction shows too much it’s good because natural gas economic infrastructure Kinder Morgan (NYSE: KMI), Williams (NYSE: WMB)and Targa Resources(NYSE: TRGP). They seem like a no-brainer to buy right now for those with about $1,000 to invest.
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Kinder Morgan operates the world’s largest natural gas transportation network. Works 66,000 miles of pipesthat transport more than 40% of the country’s gas production. It also has 15% of the country’s natural gas reserves. About 64% of the company’s revenue comes from natural gas.
The company at the moment with $5.1 billion of expansion projects underway, about $4.3 billion of new gas infrastructure. The largest project is a $1.7 billion investment to expand the pipeline system to provide 1.2 bcf/d of additional gas to Southeast markets that should come online in late 2028. Kinder Morgan has many other potential projects in the pipeline, fueled by they are rich it saw an opportunity to expand its network.
Kinder Morgan’s growth projects must give yourself oil to grow its cash flow and share. The biggest pipeline currently offers a yield of over 4%. It can turn a $1,000 investment into more than $40 in annual revenue at that rate.
Williams is a leader in gas infrastructure. It operates over 300,000 miles of pipelines across the US, handling one-third of the country’s natural gas demand. The most famous is Transco, the largest gas pipeline in the country by volume.
The company has a long a list of gas infrastructure projects taking place on its platform. They should come online by the end of the decade, providing a lot reflected in its ability to grow its earnings. Williams expects to grow its earnings by 5% to 7% annually over the long term, which must be supported the same rate of growth in its passing 3%-yield dividend.
Williams has a larger pipeline of projects than those he is working on developing. It can invest more than 10 billion dollars on 30 projects that can come online in 2026 to 2032. fixed time. Securing these projects would give it more fuel to grow its earnings and dividend in the future.
Targa Resources is a leading international real estate company. It has gas collection and processing facilities, natural gas liquids pipes and components, and liquid petroleum gas export capacity. Targa has the largest gas gathering and processing position in the Permian Basin, that is the world’s source of oil and gas.
The mid-sized energy company has several projects underway, including six more gas production facilities in the Permian that are due to come online by 2026. These projects position it to participate in growing regions. It also has several other projects underway or in development to further expand growth beyond this year.
Targa Resources expects to return 40% to 50% of its growing revenue to investors over the next several years. It expects to increase its output 1.5% faster, targeting an increase of 33% in 2025 and annual growth beyond that. Targa also looks forward to it repurchase of shares.
The expected increase in energy demand over the next decade should spur strong growth in demand for natural gas. This is giving gas companies many opportunities to expand their systems. Kinder Morgan, Williams, and Targa Resources are leaders in this sector, which puts them in the best positions to grow their earnings and dividends at attractive prices in the future, which should accelerate. all power return to investors their money.
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Matt DiLallo has positions in Kinder Morgan. The Motley Fool has positions in and recommends Kinder Morgan. The Motley Fool has a disclosure policy.
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