Why I Just Bought More of This 8%-Yielding Dividend Stock

Core Viewpoint - Energy Transfer LP is viewed as an attractive investment opportunity despite recent stock price declines, with strong fundamentals and growth prospects supporting this view [1]. Valuation - Energy Transfer's stock trades at a forward price-to-earnings ratio of 10.8 and an enterprise value-to-EBITDA multiple of 7.8, indicating attractive valuation metrics [4]. - The trailing 12-month price-to-sales ratio stands at a low 0.72, further emphasizing its appealing valuation [4]. Distribution - The company offers a high distribution yield of 8%, with solid distribution coverage supported by cash flow [5]. - Energy Transfer anticipates annual distribution growth of 3% to 5%, with a recent increase of 3% announced on October 28, 2025 [5]. Financial Position - Management asserts that Energy Transfer is in its strongest financial position in history, with leverage ratios within the target range of 4x to 4.5x despite recent acquisitions [6]. Cash Flow Generation - The company generates steady and reliable cash flow, operating approximately 140,000 miles of pipeline and owning energy infrastructure assets across major U.S. production basins [7]. Growth Prospects - Energy Transfer has signed multiple agreements to supply natural gas to major clients, including Oracle and Fermi America, highlighting its growth potential in the data center sector [8][9]. - The company is investing in new infrastructure, including natural gas processing plants and electric generation facilities, to capitalize on growth opportunities [10]. Analyst Sentiment - Among 19 analysts covering Energy Transfer, 17 rated it as a "buy" or "strong buy," with an average 12-month price target suggesting an upside potential of approximately 32% [11].