This energy stock stands to benefit if GOP wins the midterm elections

“XLE” – the Energy Select Sector SPDR Fund is already up more than 20% for the year but energy stocks are not out of room to run just yet, says Al Rabil. He’s the Co-Founder and Chief Executive of Kayne Anderson Capital Advisors.

Rabil sees more upside in energy stocks

His bullish view is predicated, of course, on the “structural deficit” that was exacerbated in 2022 after Russia waged a war against Ukraine. On CNBC’s “The Exchange”, Rabil said:

On top of that, demand for energy will climb even further once China comes back online.

Part of the reason why he’s constructive, though, is also that a GOP victory in the midterm elections could be a positive for the energy space and particularly for the pipeline companies. To that end, Rabil likes Targa Resources Corp (NYSE: TRGP).

Rabil’s bull case for Targa Resources

Just last week, this energy infrastructure company reported its third-quarter revenue that came in well below the Street expectations. Still, Rabil said:

A near 2.0% dividend yield also makes it more exciting to own the stock that’s already up about 35% year-to-date. Targa is now calling for $2.85 billion to $2.95 billion in full-year adjusted EBITDA.