1 Magnificent High-Yield Pipeline Stock Down 20% to Buy and Hold Forever

Core Viewpoint - Energy Transfer is positioned as an attractive investment opportunity for income-focused investors, especially with its stock price down approximately 20% from recent highs, resulting in a yield close to 8% [2][3] Company Overview - Energy Transfer operates one of the largest integrated midstream systems in North America, handling the transportation, processing, and storage of natural gas, crude oil, refined products, and natural gas liquids (NGLs) [4] - The company's extensive network connects major producing basins in the U.S., from the Permian to the Marcellus Shale, and links to key Gulf Coast export hubs, providing a competitive advantage [5] Business Model - Approximately 90% of Energy Transfer's EBITDA is expected to derive from fee-based services, which are insulated from fluctuations in energy prices [6] - The company has achieved the highest percentage of take-or-pay contracts in its history, ensuring revenue regardless of service usage [6] Financial Health - Energy Transfer has improved its balance sheet significantly since cutting its distribution in 2020 to reduce debt and fund growth [7] - The company has lowered leverage and rebuilt distribution coverage, with the latest quarter showing distributable cash flow covering the distribution by more than 2 times [8] Growth Prospects - Management anticipates annual distribution increases of 3% to 5%, supported by consistent fee-based cash flows and new projects [8] - Energy Transfer is reentering a growth phase with multiple projects in its pipeline, making the stock appear undervalued compared to peers and historical performance [9]