Should You Buy Energy Transfer While It's Trading Below $20?

Group 1: Company Overview - Energy Transfer operates midstream businesses, primarily owning and operating pipelines, which provide reliable cash flows through the energy cycle [2] - The company also acts as the general partner to two other publicly traded master limited partnerships: Sunoco LP and USA Compression Partners, adding complexity and potential volatility to its operations [4] Group 2: Historical Performance - Energy Transfer cut its distribution by 50% in 2020 to strengthen its balance sheet during a challenging period for the energy industry, which negatively impacted unit holders [5][6] - The company's units experienced significant growth until around 2016, after which they have struggled to exceed $20 per unit, coinciding with weak oil prices [8] - A notable event in the company's history involved a failed acquisition of Williams, which raised concerns about potential debt and dividend cuts, leading to a loss of investor confidence [9] Group 3: Comparison with Peers - Other midstream energy companies, such as Enterprise Products Partners and Enbridge, have demonstrated more consistent dividend growth, with Enterprise increasing its distribution for 26 years and Enbridge for 30 years [10] - While Energy Transfer offers a higher distribution yield of 7.8%, the consistency and reliability of dividends from its peers may present a more attractive option for investors focused on stability [11]