Three Effortless Energy Shares to Purchase with only $1,000 at Present Moment
The United States is on the brink of an unprecedented spike in energy consumption. Over the past two decades, electricity demand in the country barely increased, but forecasts predict a significant increase over the next decade. This growth is projected to be over 10 times faster than the last decade due to factors such as electrifying heating and transport systems, the rise of electric vehicles, and AI data centers.
Natural gas is expected to play a key role in meeting this increased demand. Analysts anticipate an additional 20 billion cubic feet per day (bcf/d) of gas consumption by 2030, which is already 108 bcf/d as of last year. Furthermore, an additional 10 bcf/d of gas demand from data centers is yet to be factored in. This forecast is great news for gas infrastructure stocks like Kinder Morgan (KMI -0.07%), Williams (WMB -0.52%), and Targa Resources (TRGP -0.51%). They are attractive investment options for individuals with at least $1,000 to invest now.
Prominent player in gas infrastructure
Kinder Morgan is the country's largest natural gas transmission network operator, managing 66,000 miles of pipelines that transport over 40% of the country's gas production. Additionally, the company controls 15% of the nation's natural gas storage capacity. Approximately 64% of the company's revenue is derived from natural gas.
Currently, Kinder Morgan has $5.1 billion worth of expansion projects underway, with $4.3 billion intended for new natural gas infrastructure. The most significant project is a $1.7 billion investment to expand a pipeline system, supplying 1.2 bcf/d of additional gas to Southeast markets by late 2028. Kinder Morgan boasts several potential projects in the pipeline, fueled by the most promising expansion opportunity it has ever seen.
Kinder Morgan's expansion projects are expected to drive growth in cash flow and dividends. The pipeline giant currently yields over 4%, allowing a $1,000 investment to generate over $40 of annual dividend income at that rate.
Numerous projects in the works
Williams is a key player in gas infrastructure, managing over 33,000 miles of pipelines within the U.S., serving approximately one-third of the country's gas demand. The company's most prominent asset is Transco, the country's largest gas pipeline by volume.
Williams has numerous gas infrastructure projects underway across its platform, set to come online through the end of the decade. These projects provide a better understanding of the company's capacity to grow its earnings. Williams aims to increase its earnings by 5% to 7% annually over the long term, supporting a similar growth rate in its 3%-yielding dividend.
Williams has several projects beyond its current development pipeline. If secured, it could invest over $10 billion across 30 potential projects by 2026-2032, thereby driving further earnings and dividend growth.
Robust dividend growth ahead
Targa Resources is a leading midstream infrastructure company, operating natural gas gathering and processing assets, natural gas liquids pipelines and fractionation facilities, and liquid petroleum gas export capabilities. Targa has the largest gas gathering and processing position in the Permian Basin, one of the world's top oil and gas resources.
Targa Resources has several expansion projects in progress, including six more natural gas processing plants in the Permian, set to come online by 2026. These projects position it well to participate in the region's growing volumes. Targa also has various other projects underway or in development to fuel additional growth beyond this year.
Targa Resources plans to return 40% to 50% of its growing cash flows to investors over the next few years. It anticipates growing its 1.5% yield swiftly, targeting a 33% increase by 2025 and ongoing yearly growth thereafter. Targa also intends to opportunistically repurchase shares.
Capitalizing on escalating gas demand
The anticipated surge in power demand over the upcoming decade is expected to drive robust growth in natural gas demand. This trend offers gas infrastructure companies more opportunities to expand their systems. Kinder Morgan, Williams, and Targa Resources are leading companies in the sector, giving them ideal positions to increase their earnings and dividends at attractive rates in the future, fostering strong overall returns for their investors.
In light of the projected increase in natural gas consumption due to factors like electrifying heating systems and the rise of electric vehicles, Kinder Morgan is considering a $1.7 billion investment to expand its pipeline system, promising a significant boost in gas supply to Southeast markets by 2028. This investment opportunity is considered the company's most promising expansion yet, making Kinder Morgan an attractive option for individuals looking to invest in finance and benefit from the growth in gas infrastructure stocks.
Given the expected rise in power demand over the next decade, Williams is actively pursuing numerous gas infrastructure projects across its platform that are set to come online by the end of the decade. The successful completion of these projects will bolster the company's earnings capacity, enabling it to target an annual 5% to 7% increase in earnings and a corresponding growth in its 3%-yielding dividend.
