- August 27, 2026
- Noah
- 0
Part of my investment process is to find the No. 1 or No. 2 company in any given industry when it’s on sale. I think I found one in my latest buy: EQT Corporation . The Pittsburgh-based company was founded in 1888 and today is the largest natural gas producer in the U.S., with a massive footprint in the Appalachian Basin. But EQT doesn’t just get gas out of the ground. It also owns gathering and transmission pipelines, along with storage and processing infrastructure, giving it a vertically integrated business that allows for higher margins than competitors. Key points Natural gas could be one of the biggest winners from the enormous increase in power demand driven by AI and data centers. EQT is the largest U.S. natural gas producer, with the size, scale and infrastructure to capitalize on growing demand. Its unique operating strategy helps keep development costs low, and I’m getting all of that at an attractive valuation. The AI infrastructure buildout is creating an enormous need for power. All of those data centers being built across the country need electricity around the clock, which raises a critical question: Where is all that power going to come from? I think natural gas is going to be the real winner over the next decade or two, and EQT gives me a way to invest in that opportunity. Why I’m buying Natural gas has a powerful demand tailwind AI isn’t the only source of growing demand. Liquefied natural gas, or LNG, exports are rising as more American gas is shipped overseas. The U.S. Energy Information Administration expects volumes to grow about 15% this year and another 7% next year. But some on Wall Street believe that forecast for next year’s growth is too low. The challenge is getting all that gas where it needs to go. We don’t have enough pipeline capacity today, but that’s likely to change over the next decade as more infrastructure gets built. I like EQT’s size and scale The Appalachian Basin is one of the country’s biggest natural gas regions, giving EQT both size and scale, along with a deep inventory of high-quality drilling locations. And the company’s infrastructure is substantial. EQT produces 6% of all the natural gas developed in the country. EQT YTD mountain EQT Corp, YTD It has a disciplined operating model One thing that really stands out to me is what EQT calls its “combo-development” strategy. Imagine EQT is developing a series of wells. It coordinates several multi-well sites as one large project, planning the drilling, water, sand, supplies and pipelines in advance. That means rigs spend more time drilling and less time moving between sites. The payoff is greater efficiency and lower costs. In the second quarter, EQT’s capital spending was 9% below the low end of its forecast, while it produced more natural gas than expected. This is what makes them competitive. Why now? After an 11% pullback the last six months, the stock is now trading for just 13 times earnings, well below its historic average price-earnings ratio of 34 times. EQT trades for 5.8 times cash flow, also a reasonable valuation. And, it’s not fueling its growth with too much debt, carrying a net debt to EBITDA of less than one (0.8 to be exact). Bottom line EQT is a leader in the natural gas space that is trading on the cheap, just as the sector is about to see a tremendous tailwind from AI power demand. Disclosures: Link owns in Hightower portfolio. All opinions expressed by the [CNBC Pro contributors] are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. This content is provided as part of our editorial output for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to buy any security or other financial asset. The content is general in nature and does not reflect any individual’s unique personal circumstances. The above content might not be suitable for your particular circumstances. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
