ET Stock Recent News

I last compared ET and WES in May 2023 and labeled both "buys." Since then, both have crushed the broader midstream sector. I revisit them today and share why I only own one of them.

Energy stocks have been the worst performers in 2024.

Energy Transfer remains a compelling high-income investment with a 7.9% yield, strong operational performance, and robust growth prospects through strategic acquisitions and high demand. ET's asset base includes extensive midstream infrastructure, with 90% fee-based Adjusted EBITDA, minimizing commodity price exposure and supporting stable financial performance. ET's recent acquisitions and organic growth have driven significant EBITDA and distributable cash flow increases, positioning it for continued success and potential for market-beating total returns.

Dividend investing can be a stable and effective way at compounding gains over the long term through a buy-and-hold strategy. Dividend stocks tend to be established and mature companies in sectors such as utilities, real estate, and consumer staples, meaning that they oftentimes lack the flashy appeal of trending stocks.

Midstream players secure additional cashflows from their huge backlog of growth projects, which brightens the outlook for the Zacks Oil and Gas - Pipeline MLP industry. Some of the frontrunners in the industry are Enterprise (EPD), Energy Transfer (ET), and Plains All American Pipeline (PAA).

Historically, rapid growth has led to ongoing concerns regarding excessive debt and poor distribution coverage among some analysts. Over the last year, ET has outperformed the S&P 500 while crude oil has declined 21.5%, suggesting investor confidence. Caution demands investors revisit the distribution cut in late October 2020.

Electricity demand could surge over the coming years, powered by AI data centers. Natural gas demand will probably spike as it helps fuel AI's growth.

Energy Transfer reported yet another strong quarter. While the underlying financials have improved a lot, the share price has remained relatively flat. This in combination with very bullish signals from Q2 data points has, in my opinion, rendered the FWD EV/EBITDA of 8.25x multiple even more attractive.

TipRanks' analyst ranking service pinpoints Wall Street's best-performing stocks, including Walmart and Energy Transfer.

Energy Transfer offers an 8% yielding payout that should rise by 3% to 5% per year. Delek Logistics currently has a yield in the double digits.