Energy Transfer (ET) Distributable Cash Flow Covers 1.8x Yield, Solid Future Growth Prospects
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Source: Yahoo Finance
- Cash Flow Coverage: Energy Transfer's distributable cash flow covered its distribution by 1.8 times in the first nine months of 2025, demonstrating a reliable income source that supports its lofty 7.5% yield, thereby boosting investor confidence.
- Capital Investment Plans: The company plans to invest $5.5 billion in capital projects for 2026, which is expected to support distribution growth of 3% to 5%, indicating its commitment to becoming a more reliable income investment and enhancing long-term appeal.
- Historical Issues Impact: While the future outlook is positive, past events such as the distribution cut during the pandemic in 2020 and uncertainties surrounding the 2016 acquisition of Williams Companies may lower trust among conservative investors, affecting market performance.
- Alternative Investment Options: Given Energy Transfer's historical decisions, investors may prefer alternatives like Enterprise Products Partners and Enbridge, which have more stable records of distribution growth, even though their yields are slightly lower.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ET is 20.65 USD with a low forecast of 17.00 USD and a high forecast of 23.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 18.240
Low
17.00
Averages
20.65
High
23.00
Current: 18.240
Low
17.00
Averages
20.65
High
23.00
About ET
Energy Transfer LP owns and operates a diversified portfolios of energy assets in the United States, with more than 140,000 miles of pipeline and associated energy infrastructure. The Company’s strategic network spans 44 states with assets in all of the major United States production basins. Its core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The Company’s segments include intrastate transportation and storage, interstate transportation and storage, midstream, NGL and refined products transportation and services, crude oil transportation and services, investment in Sunoco LP, investment in USA Compression Partners, LP (USAC), and all other. It also owns Lake Charles LNG Company, LLC, its wholly owned subsidiary, which owns an LNG import terminal and regasification facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Energy Market Dynamics: Natural gas futures surged by 5.49% this week, with wholesale electricity prices in the PJM region reaching unprecedented levels, leading to heightened anxiety among consumers regarding utility bills and signaling market opportunities for investors.
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Energy Transfer Declares Quarterly Dividend Increase
- Quarterly Dividend Increase: Energy Transfer has declared a quarterly dividend of $0.3350 per share, reflecting a 0.8% increase from the previous $0.3325, demonstrating the company's ongoing commitment to stable cash flow and shareholder returns.
- Attractive Yield: The forward yield of 7.47% not only provides investors with substantial cash returns but also has the potential to attract more income-seeking investors to the company's stock, enhancing its market appeal.
- Dividend Payment Schedule: The dividend is payable on February 19, with a record date of February 6 and an ex-dividend date also set for February 6, ensuring shareholders receive their earnings promptly and bolstering market interest in the stock.
- Bond Offering Support: Energy Transfer is also pricing a $3 billion bond offering, which not only supports the company's capital structure but also provides funding for future investments and dividend payments, reinforcing its financial stability.
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