Evaluating Energy Transfer (ET) Stock's Actual Performance

Core Viewpoint - Energy Transfer has achieved significant total returns over the past five years, outperforming the S&P 500, primarily due to improvements in its financial profile and high distribution yields [1][4]. Performance Summary - Over the past five years, Energy Transfer's unit price has increased by 170.7%, significantly outperforming the S&P 500's 86.5% increase [2]. - Including reinvested distribution payments, Energy Transfer's total return over five years is 294.8%, further distancing it from the broader market [3]. Financial Position - Five years ago, Energy Transfer faced a challenging financial situation with a heavy debt load and pandemic-related impacts on energy demand, leading to a distribution cut [4]. - Currently, Energy Transfer is in its strongest financial position ever, with a leverage ratio within the target range of 4.0-4.5 times, achieved through debt repayment and funding expansion projects [5]. Growth and Investments - The company has invested heavily in organic expansion projects and strategic acquisitions, contributing to a 10% compound annual growth rate in adjusted EBITDA since 2020 [6]. - The improved earnings and financial profile have allowed Energy Transfer to increase its distribution payments, now higher than pre-pandemic levels [6][7]. Distribution Impact - The high-yielding distribution, currently at 8%, has significantly contributed to the total returns, reinforcing the importance of dividends in the overall performance of Energy Transfer [2][7].