Energy stocks are emerging as a defensive option for investors navigating geopolitical uncertainty, with natural gas exporters and pipelines offering stability and income potential.
BNN Bloomberg spoke with Jay Hatfield, CEO, founder and portfolio manager at Infrastructure Capital Advisors, who pointed to LNG exports and midstream assets as key beneficiaries of global supply disruptions and shifting energy demand.
Key Takeaways
- LNG exporters are positioned to benefit from global supply disruptions, including damaged export capacity in key producing regions.
- Pipeline and midstream energy companies offer defensive characteristics with low volatility and strong income through dividends.
- Natural gas demand is supported by international markets and structural growth tied to energy needs and infrastructure.
- Higher-beta tech plays tied to AI offer growth but carry greater risk compared with defensive energy names.
- Market volatility tied to geopolitical risks and weak seasonal trends may create buying opportunities in undervalued sectors.
Read the full transcript below:
LINDSAY: It is time now for Hot Picks, and today we’re zeroing in on three energy stocks to power up your portfolio. Let’s get more perspective from Jay Hatfield, founder, CEO and portfolio manager at Infrastructure Capital Advisors. Great to have you with us. Thanks so much.
JAY: Thanks for having me on.
LINDSAY: Before we dive into these picks, are these good if the war goes longer than expected, or do you like them regardless?
JAY: We do think midstream — these are companies held by our AMCA ETF — is a good long-term asset class. Obviously, they’ve been doing well during the war. To be fair, if the war is resolved, they’ll underperform, but they’re great long-term investments with strong yields. They were flat last year, so they’re starting from a very low valuation base.
LINDSAY: Okay, let’s get to it. Your first pick is Cheniere. Why do you like this one?
JAY: Cheniere is the largest exporter of natural gas from North America. We’re really one basin, so it’s better to say North America than just the U.S. What’s compelling is the long-term opportunity. There’s been damage to export capacity in Qatar, and it could take three to five years to replace that. Cheniere is expanding its export capacity and benefits from higher natural gas spreads between the U.S. and global markets, particularly Europe. It’s a strong long-term investment that had been overlooked and started from a low base.
LINDSAY: Your next pick is seeing quite a rally today, up almost seven per cent after Nvidia said it would invest $2 billion in Marvell Technology. Was this already your pick before that news?
JAY: It was. It’s the largest position in ICAP and also in our large-cap income fund. We’re very focused on valuation, and this company fell out of favour after giving conservative guidance. The stock sold off, but the fundamentals remain strong. They have ASICs and optics, which is why you saw Nvidia’s investment. They’re growing at about 30 per cent and trading around 20 times earnings, which is very attractive. We have a $180 target and still see significant upside, though it’s a higher-beta name compared to Cheniere.
LINDSAY: Are there risks you’re watching for with this company?
JAY: There aren’t many operating risks right now, as fundamentals are strong and we’ve even raised our estimates due to increased opportunity with Nvidia. The main risk is its higher beta — around 2.3 times. If we’re wrong and the war resolves quickly, this isn’t where you want to be. In that case, defensive names like Cheniere or other energy and midstream plays would perform better.
LINDSAY: Lastly, Energy Transfer LP. You say pipelines are a very defensive sector — is that why you like this one?
JAY: It’s even more defensive. It trades at about 13 times earnings and offers a seven per cent yield. It hasn’t rallied much, so it still offers value. It’s a defensive way to generate total return, with dividend growth of about five per cent annually. It behaves somewhat like a bond, with low beta and strong income, performing well when broader markets are weak.
LINDSAY: You’ve said you expect clarity on reopening the Strait of Hormuz by mid-April. We’ve seen major impacts across markets, especially in private credit. You believe worst-case losses there could be around five per cent. Why?
JAY: That assumes a 10 per cent default rate — similar to the Great Financial Crisis — and a 50 per cent recovery rate. Even then, markets have overreacted. Many stocks with limited exposure to private credit are down 30 to 40 per cent. That suggests an overreaction. March tends to be weak because there’s less earnings news, so negative narratives dominate. We see this as an opportunity to buy discounted sectors where the fundamentals remain intact.
LINDSAY: We’ve also seen volatility in software stocks tied to AI concerns. How do you view that?
JAY: The selloff was driven by conflicting arguments — that AI would have no applications, and at the same time that it would disrupt everything. We think the better approach is to focus on infrastructure plays like Marvell rather than trying to pick software winners. The competitive landscape in software will take time to shake out, so it’s safer to invest in the underlying infrastructure supporting AI growth.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| LNG NYSE | N | N | N |
| MRVL NASDAQ | N | N | N |
| ET NYSE | N | N | N |
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This BNN Bloomberg summary and transcript of the April 1, 2026 interview with Jay Hatfield are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
