For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Cheniere Energy (LNG) ten years ago? It may not have been easy to hold on to LNG for all that time, but if you did, how much would your investment be worth today?

Cheniere Energy's Business In-Depth

With that in mind, let's take a look at Cheniere Energy's main business drivers.

Houston, TX-based Cheniere Energy Inc. is primarily engaged in businesses related to liquefied natural gas (or LNG) through its two business segments: LNG terminal; and LNG and natural gas marketing. The company, through its controlling interest in Cheniere Energy Partners L.P., owns and operates the Sabine Pass LNG terminal in Louisiana – North America’s first large-scale liquefied gas export facility. Furthermore, Cheniere Energy owns and operates the 94-mile Creole Trail Pipeline – an interconnect between the Sabine Pass receiving terminal and the downstream markets – through its subsidiary.

Cheniere Energy intends to construct up to six trains at Sabine Pass with each train expected to have a capacity of about 4.5 million tons per annum. While Trains 1, 2, 3 and 4 are functional; Train 5 is undergoing commissioning. Train 6 is being commercialized and has secured the necessary regulatory approvals.

Cheniere Energy Partners is also developing a liquefaction and export terminal in Corpus Christi, TX. Train 1 commissioning is complete, Train 2 is under construction and Train 3 is commercialised with necessary approvals in place. The facility came online in 2019. Cheniere Energy intends to develop seven midscale liquefaction trains adjacent to the Corpus Christi Liquefaction facility (CCL). The company has initiated the regulatory approval process regarding same. The total production capacities for these trains are expected to be approximately 9.5 Mtpa.

Additionally, Cheniere Energy is involved in LNG and natural gas marketing activities through its subsidiary, Cheniere Marketing LLC.

Global LNG demand is likely to continue growing for the next few years. Cheniere Energy, the U.S.’s only listed LNG export pure play, foresees the fundamentals of LNG to be favorable in the long run, considering the secular shift to the cleaner burning fuel for power generation worldwide and in the Asia-Pacific region in particular. While the increasing demand for gas in the European power sector will be a key factor in the near-term LNG supply rise, the consumption boost is primarily set to come from Asian importers like China, India, South Korea and Pakistan.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Cheniere Energy a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in July 2012 would be worth $9,851.96, or a gain of 885.20%, as of July 21, 2022, according to our calculations. This return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 190.60% and the price of gold went up 2.84% over the same time frame.

Looking ahead, analysts are expecting more upside for LNG.

Cheniere Energy, with its first-mover advantage in exporting liquefied natural gas from the United States, is primed for significant revenue and earnings growth on the back of solid operations and long-term contracts. The firm’s gas supply deals for its Sabine Pass and Corpus Christi projects offers excellent cash flow visibility in the coming years. Cheniere Energy’s recent dividend initiation reflects the dramatic improvement in its fundamentals and transformation from a cash guzzler to a free cash flow generator. However, setting up natural gas liquefaction plants is a costly affair that requires massive capital spending. This has translated into a huge long-term debt burden of nearly $29 billion for the company with a debt-to-capitalization of 104.5%. As such, Cheniere Energy stock warrants a cautious stance.

The stock has jumped 7.03% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2022; the consensus estimate has moved up as well.
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