All It Takes Is $4,500 Invested in This Dirt Cheap Value Stock to Help Generate Over $350 in Passive Income per Year

Core Viewpoint - Energy Transfer is currently undervalued, offering an attractive yield due to its low valuation compared to peers, making it a compelling investment opportunity for passive income generation [1][4][8]. Group 1: Financial Performance - Energy Transfer is projected to generate over $16 billion in adjusted EBITDA this year, trading at less than nine times EV to EBITDA, which is significantly lower than the peer average of around 12 times [4][5]. - The company has stable cash flows, with approximately 90% of its earnings coming from fee-based sources, and it has a strong financial position, covering its high-yield payout by nearly 1.9 times in the first half of the year [5][7]. - The leverage ratio is within the lower half of its target range of 4.0-4.5 times, indicating a solid financial foundation [7]. Group 2: Growth Prospects - Energy Transfer plans to invest about $5 billion in growth capital projects this year, including significant expansions in natural gas processing and pipeline infrastructure, which are expected to drive earnings growth in 2026 and 2027 [10][11]. - The company has a robust pipeline of expansion projects scheduled to enter commercial service annually through the end of the decade, with the largest being the $5.3 billion Desert Southwest Expansion Project [11][12]. - Energy Transfer conservatively plans to increase its payout by 3% to 5% per year, providing a steady increase in passive income for investors [13]. Group 3: Investment Appeal - The current yield of 7.9% allows investors to generate substantial passive income, with an investment of $4,500 yielding over $350 annually [2][14]. - Despite potential tax complications due to the MLP structure, the high yield and growth potential make Energy Transfer an attractive investment for those willing to manage the additional tax paperwork [14].