10 Best Infrastructure Stocks To Buy Now

6. Targa Resources Corp. (NYSE:TRGP)

Number of Hedge Fund Holders In Q2 2024: 39

Targa Resources Corp. (NYSE:TRGP) is a Texas based company that develops infrastructure to store and transport natural gas, natural gas liquids, and associated fuel. Its exposure to the natural gas industry without any alternatives means that the firm faces trouble if the industry slows down as has been the case in 2024. However, unlike several other gas infrastructure firms, Targa Resources Corp. (NYSE:TRGP) has managed to hedge this storm through its presence in America’s Permian Basin. As of 2022, Permian accounted for 18.3% of America’s gas production which marked a sharp jump from 2011’s 5.8%. This has helped Targa Resources Corp. (NYSE:TRGP), with the stock being up a massive 74% year to date. It has also enabled the firm to tamper down potential forecast drops. The firm also benefits from a tertiary logistics and marketing business that operates fractional facilities and enables Targa Resources Corp. (NYSE:TRGP) to gauge the demand for its gas by operating directly in the market.

Targa Resources Corp. (NYSE:TRGP)’s management shared details about its Permian operations during the Q2 2024 earnings call:

“Activity in the Permian remains very strong, supporting our view of continued long-term growth from the basin. Our Permian volumes during the second quarter increased about 275 million cubic feet per day over the first quarter, which is a full plant. And year-over-year, our volumes in the Permian are up more than 600 million cubic feet per day. And currently, our volumes in the Permian are up another 200 million cubic feet per day compared to the second quarter. We expected strong growth from our Permian assets, but the growth we have seen this year has exceeded our expectations.

We now expect low double-digit percentage volume growth this year, which sets us up well for meaningful growth in 2025 and beyond. This higher growth rate is driving incremental EBITDA and requiring additional growth capital investment. These volumes are core to our business, and we benefit across the integrated NGL value chain, driving higher margins into our downstream business and generating strong ROIC. Given higher-than-anticipated Permian volumes and an outlook for continued strong activity across our Midland and Delaware footprint, we announced our next two plants in the Permian, one in the Midland Basin and another in the Delaware Basin. Some spending for these plans was included in the forecast we provided back in February, but the timing and cadence of spending has accelerated.”