3 Brilliant Energy Stocks to Buy Now and Hold for the Long Term

The article is broadly constructive on midstream energy stocks, highlighting Energy Transfer's projected $5.5 billion to $5.9 billion of growth capex, 6.7% yield, and 3% to 5% annual distribution growth. It also cites Enterprise Products Partners' 5.6% yield, 27-year distribution growth streak, and Williams' $7.0 billion to $7.6 billion growth budget with a $15.5 billion transmission backlog plus $9.6 billion in power solutions. The broader backdrop is higher oil and energy-sector sentiment from the Iran/Strait of Hormuz conflict, with AI-driven power demand framed as an additional growth catalyst.

Analysis

The market is starting to price midstream less like a commodity beta trade and more like a regulated infrastructure plus AI power bottleneck play. That matters because the incremental winner is not the producer with the most wells, but the network owner that can monetize local gas scarcity near data-center buildouts; WMB looks best positioned on that second-order effect, while ET’s Permian footprint gives it more volume optionality but also more execution risk as multiple large projects compete for capital. EPD remains the cleanest “bond proxy with growth,” and in a falling-rate or lower-volatility tape its relative outperformance should come from balance-sheet scarcity, not headline yield.

The contrarian angle is that consensus is too comfortable extrapolating mid-teens or 20% project returns without fully discounting siting, interconnect, and permitting bottlenecks. The AI power narrative is real, but the revenue conversion can slip 12-24 months if utility approvals, upstream gas gathering, or local opposition slow project timing; that favors names with already-advanced assets and penalizes those relying on greenfield growth. In other words, the core risk is not demand; it is timing mismatch between capital deployed today and cash flow recognized later.

Geopolitics is an accelerant, but likely not the main valuation driver beyond the next few weeks unless the Strait of Hormuz issue persists. If crude stabilizes, the market will rotate from “higher oil” beneficiaries to “durable cash return” names, which should narrow the gap between ET and EPD while leaving WMB’s growth premium intact. The bigger multi-quarter tell is whether AI-related gas demand turns into contracted, fee-based throughput or remains a narrative attached to capex announcements.

Key Decisions for Investors

• Long WMB vs. short EPD for 3-6 months: express the view that AI-related power demand is underappreciated and growth duration deserves a premium; target relative outperformance if project milestones keep landing, but cap risk if rates fall sharply and income names re-rate.
• Own EPD as the defensive midstream core through the next 12 months: best risk/reward for capital preservation plus dividend growth; downside is mostly limited to a rates shock or a sector de-rating, while upside comes from free-cash-flow buybacks compounding the distribution story.
• Trade ET tactically on pullbacks only: acceptable for a 6-12 month total-return trade if project execution remains on schedule, but position smaller than WMB/EPD because the market may discount complexity and capex intensity if macro volatility fades.
• Pair long WMB / short XLU for 3-6 months: if AI power demand is real, a traditional utilities short helps isolate the value of behind-the-meter gas-fired solutions versus regulated utility returns.
• Use options rather than cash equity on ET: sell cash-secured puts or buy call spreads 2-4 months out to capture elevated energy/geopolitical volatility while limiting drawdown if the Hormuz premium evaporates.