Core Insights - Energy Transfer LP (ET) is an MLP that issues a K-1 tax form, indicating its structure and tax implications for investors [1] Group 1: Company Overview - Samuel Smith, a lead analyst and Vice President at various dividend stock research firms, has a diverse background in engineering and project management, contributing to his expertise in investment analysis [1] - The High Yield Investor investing group, led by Samuel Smith, focuses on balancing safety, growth, yield, and value in investment strategies [1] Group 2: Investment Strategy - High Yield Investor offers real-money core, retirement, and international portfolios, along with regular trade alerts and educational content for investors [1] - The service includes an active chat room for like-minded investors, fostering community engagement and shared insights [1]

Core Insights - Energy Transfer LP (ET) is an MLP that issues a K-1 tax form, indicating its structure and tax implications for investors [1] Group 1: Company Overview - Samuel Smith, a lead analyst and Vice President at various dividend stock research firms, has a diverse background in engineering and project management, contributing to his investment analysis [1] - The High Yield Investor investing group, led by Samuel Smith, focuses on balancing safety, growth, yield, and value in investment strategies [1] Group 2: Investment Strategy - High Yield Investor offers various portfolios including core, retirement, and international options, along with regular trade alerts and educational content for investors [1]

Group 1 - The energy sector is currently the best performing sector in the S&P 500, with an increase of almost 20% year to date [1] - The article highlights the shift in investor sentiment towards the energy sector, which had previously been a disappointment [1] - The author emphasizes a strategy focused on identifying attractive risk/reward opportunities, particularly in sectors like technology and energy [1] Group 2 - The investing group mentioned specializes in identifying high-potential opportunities across various sectors, aiming for consistent alpha generation [1] - The approach combines price action analysis with fundamental analysis, avoiding overhyped stocks while targeting undervalued ones with recovery potential [1] - The focus is on stocks with strong growth potential and appealing turnaround plays, indicating a contrarian investment strategy [1]

Core Insights - Energy Transfer has experienced a stock rally of 42% over the past three years, with a total return of 78% when including reinvested distributions [1] Company Overview - Energy Transfer operates over 140,000 miles of pipeline across 44 states, providing delivery, storage, and terminalizing services for natural gas, LNG, NGLs, crude oil, and other refined products [2] - The company charges "tolls" to upstream extraction and downstream refining companies for using its pipelines, which insulates its business model from volatile commodity prices [3] Business Structure - Energy Transfer is structured as a tax-efficient master limited partnership (MLP), combining a return of capital and ordinary income to fund its distributions [4] - A fluctuating percentage of its high forward yield of 7.3% comes from investors' own cash, while its adjusted distributable cash flow (DCF) has remained comfortably below 100% in recent years [5] Growth Catalysts and Challenges - The company has added over 50,000 miles of pipelines through acquisitions in recent years and may pursue further acquisitions in the future [6] - Expansion in the Permian Basin and the completion of the Lake Charles LNG project in Louisiana are expected to drive organic growth [7] - Favorable policies from the Trump Administration towards fossil fuels and lower interest rates may provide additional support for the company's growth [7]

Core Viewpoint - Energy Transfer offers a high distribution yield of 7.3% with a plan for annual distribution growth of 3% to 5%, appealing to income-focused investors [1] Company Overview - Energy Transfer operates a significant North American midstream business, facilitating the transportation of oil and natural gas globally [2] - The company employs a toll taker approach, generating revenue through fees for the use of its energy infrastructure [2] Financial Performance - Energy Transfer's cash flows are generally reliable, with the volume of energy transported being more critical than the prices of oil and natural gas [3] - For the first nine months of 2025, the company's distributable cash flow covered its distribution by a strong factor of 1.8x [3] Future Growth Plans - The company has outlined $5 billion in capital spending plans for 2026 to support ongoing business growth [4] - Management has projects extending to 2029, which underpins the anticipated annual distribution growth of 3% to 5% [4] Historical Context - In 2020, Energy Transfer reduced its distribution by 50% during the energy downturn caused by the coronavirus pandemic to strengthen its balance sheet [5] - Although leverage has been reduced and distributions are now higher than pre-cut levels, the previous reduction may still concern income-dependent investors [6] Market Position - While Energy Transfer has attractive features, the midstream sector includes other high-yield options like Enterprise Products Partners and Enbridge, which have a longer history of dividend growth [7] - Investors may prefer these alternatives for potentially lower yields but greater stability during energy downturns [7]

Core Insights - The midstream segment of the energy sector is highlighted as a prime area for ultra-high-yield stocks, focusing on companies that facilitate the transportation of oil and natural gas [1] Company Summaries - **Energy Transfer (NYSE: ET)**: Offers the highest yield at 7.2%. The company previously cut its distribution in half during the pandemic to strengthen its balance sheet, but it has since resumed growth, now exceeding pre-cut levels. Future distribution growth is projected at 3% to 5% annually, supported by capital investments of up to $5.5 billion by 2026, making it suitable for aggressive investors [2][3][4] - **Enterprise Products Partners (NYSE: EPD)**: Known for reliability, it has increased its distribution for 27 consecutive years and holds an investment-grade credit rating. Its distributable cash flow comfortably covers its distribution by 1.7 times, appealing to conservative investors. Expected distribution growth is similar to that of Energy Transfer [5] - **Enbridge (NYSE: ENB)**: A leader in the midstream industry with additional exposure to regulated natural gas utilities and clean energy assets. It aims to adapt its business to align with global energy transitions. Enbridge has increased its dividend for 30 consecutive years, making it a suitable option for those seeking a clean-energy hedge despite having the lowest yield among the three at 5.6% [6][7]

Core Insights - The average person under 65 needs approximately $84,000 annually to achieve financial freedom, according to The Motley Fool [1] Investment Opportunities - Energy Transfer (NYSE: ET) offers a high income yield of 7.5%, significantly higher than the S&P 500's yield of around 1.2% [2] - To generate $84,000 in passive income from Energy Transfer, an investment of about $1.1 million is required at the current unit price of $18, based on a quarterly distribution of $0.335 per unit [4] Financial Strategy - Using the 4% rule, an individual would need to accumulate $2.1 million to withdraw $84,000 annually without depleting the principal [3] - An income-focused portfolio strategy allows for covering annual expenses solely through passive income, preserving the principal [3] Risk Factors - While investing in Energy Transfer can potentially provide sufficient passive income, relying on a single investment carries risks, especially if distribution payments are cut [5] - The risk of a distribution cut is currently lower, as Energy Transfer is in a strong financial position, with about 90% of its cash flow coming from stable, fee-based sources [6] - The company retains over half of its cash flow for reinvestment, aiming to increase distributions by 3% to 5% annually [6]

Core Insights - Energy Transfer's unit price surged 11.9% in January 2026, significantly outperforming the S&P 500's 1.4% gain [1] - The surge was driven by rising crude oil prices and the company's positive outlook for 2026 [1][6] Oil Price Impact - WTI crude oil prices increased by 14% in January, marking the first monthly gain in six months, influenced by potential supply issues in Venezuela and Iran [4] - Although oil prices impact only 5% to 10% of Energy Transfer's earnings, higher prices can boost those earnings and incentivize increased production, enhancing the company's volumes and growth prospects [5] 2026 Outlook - Energy Transfer expects adjusted EBITDA for 2026 to be between $17.3 billion and $17.7 billion, reflecting a growth rate of 7.5% to 10% from last year's $16.1 billion, a significant acceleration from less than 4% growth in 2025 [7] - The company anticipates benefits from several expansion projects, including the Nederland Flexport NGL expansion and gas pipeline projects for Texas data centers [7] Capital Investment and Growth - Energy Transfer plans to invest between $5 billion and $5.5 billion in growth capital projects this year, up from $4.6 billion last year, primarily to enhance its gas pipeline network [8] - The company is also exploring opportunities to meet the growing power demand from AI data centers [8] Cash Distribution - The company has raised its cash distribution by more than 3% over the past year, aligning with its long-term target of 3% to 5% annual distribution growth [9]

Energy Transfer LP (NYSE:ET) is one of the 11 Best Pipeline and MLP Stocks to Buy in 2026. RBC Capital Lowered Price Target on Energy Transfer (ET) On January 28, 2026, RBC Capital lowered its price target on Energy Transfer LP (NYSE:ET) from $22 to $21 while maintaining an Outperform rating on the shares. The update was part of RBC’s broader research note previewing the fourth quarter for the U.S. Midstream industry. RBC Capital noted underperformance in stocks focused on natural gas compared to those r ...

Based in Dallas, Texas, Energy Transfer (NYSE: ET) has a very attractive 7.3% distribution yield. That is likely to attract dividend investors looking to maximize the income their portfolios generate. However, before you buy, you'll want to know a few facts about the business backing that yield. Energy Transfer is a little complex Energy Transfer is one of the largest midstream operators in North America. It basically owns energy infrastructure, such as pipelines, that help move oil and natural gas arou ...