NEW YORK (TheStreet) -- Credit Suisse made Energy Transfer Equity (ETE) its top energy stock pick for the rest of 2014, even after the pipeline and liquefied natural gas company gained about 25% in the first half of the year, significantly outperforming the S&P 500 and the Energy Select Sector SPDR (XLE)XLE.
Analysts at the investment bank believe the company, as a general partner to a handful of master limited partnerships including Energy Transfer Partners (ETP), Sunoco Logistics Partners (SXL) and Regency Energy Partners (RGP) is poised to benefit from strong distributions, especially from Energy Transfer Partners. Furthermore, Credit Suisse believes Energy Transfer Equity's Lake Charles liquefied natural gas export terminal in Louisiana presents a new opportunity for the company, possibly creating $7-to-$8 a share in value looking out one year.
Credit Suisse gives Energy Transfer Equity a price target of $56 a share and noted that the company may be worth closer to $60 a share if all of its businesses are fully valued. Most analysts, including Credit Suisse, give a slight discount to the Lake Charles LNG project since it continues to move through a series of regulatory approvals.
In March, TheStreet flagged Energy Transfer Equity as the best way to play U.S. natural gas exports given its diversified set of businesses, and what some investors believed was an under-appreciated asset in the Lake Charles LNG project. While pure-play LNG export MLP Cheniere Energy (LNG) has continued a meteoric rise in 2014, gaining more than 50% year to date, Energy Transfer Equity has also posted solid results and possibly with less risk.
Both companies have benefited from investors' apparent belief that escalating geopolitical tensions between Russian and neighboring countries in Eastern and Western Europe could underscore the imperative of U.S. LNG exports to Europe and Asia. Still, profits remain years away for LNG export terminals and projects, meaning they remain a slightly speculative investment.
But Energy Transfer Equity, by way of its owned assets and its general partner interest in publicly-traded MLPs, has a diversified source of earnings. The company currently pays a quarterly dividend of 36 cents a share and it generated $48.3 billion in revenue and $200 million in net income in 2013.
Credit Suisse also counts Antero Resources (AR), Rosetta Resources (ROSE) and Duke Energy (DUK) as its top picks in the energy and utilities sectors. On Wednesday, the firm also removed Williams Cos. (WMB), Diamondback Energy (FANG), Gulfport Energy (GPOR) and Exelon (EXC) from its top picks list, which was last updated on May 2.
For more on LNG exports, read TheStreet's initial report on Energy Transfer Equity.
-- Written by Antoine Gara in New York.