High-Yield Stocks for Passive Income Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: Fool
- Clean Energy Leadership: Clearway Energy (CWEN) secures stable cash flow through long-term power purchase agreements, supporting a 4.7% dividend yield, with expected cash flow per share growth of 7% to 8% annually through 2030, providing ample capacity for continued dividend increases.
- Energy Infrastructure Expansion: Energy Transfer (ET), a master limited partnership, generates 90% of its earnings from stable fee-based revenue, boasting a 7.1% dividend yield, and plans to invest at least $5 billion in 2023 to expand its natural gas pipeline systems, with projected annual dividend growth of 3% to 5%.
- REIT Advantages: Realty Income (O) owns a diversified property portfolio, benefiting from a 4.9% monthly dividend yield supported by long-term net leases, having increased its dividend for 113 consecutive quarters, and is expected to continue expanding its asset base with billions in annual investments.
- Telecom Cash Flow: Verizon (VZ) anticipates generating $21.5 billion in free cash flow in 2023, approximately $10 billion above its annual dividend payments, enhancing its debt repayment capacity and strategic investment potential, while maintaining a 19-year dividend growth streak.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 18.900
Low
17.00
Averages
20.65
High
23.00
Current: 18.900
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.
Energy Transfer Starts Strong in 2026 with 14% Stock Price Increase
- Stock Price Surge: Energy Transfer's stock has risen approximately 14% as of now, indicating strong market confidence in its future growth, reflecting investor attraction to its forward yield of 7.2%.
- Project Progress: The Hugh Brison pipeline project in the Permian Basin is 75% complete, with phase one expected to come online by year-end, further enhancing the company's growth potential.
- Strong Financial Performance: In Q4, EBITDA increased by 8% year-over-year to $4.18 billion, benefiting from a favorable regulatory ruling on NGL pipeline pricing that contributed an additional $56 million, showcasing the company's competitive edge in pricing.
- Optimistic Outlook: The company raised its 2026 EBITDA forecast to a range of $17.45 billion to $17.85 billion, reflecting the positive impact of its subsidiary USA Compression's acquisition, with expected future distributions growing at a rate of 3% to 5%.
See More
High-Yield Stocks for Passive Income Growth
- Clean Energy Leadership: Clearway Energy (CWEN) secures stable cash flow through long-term power purchase agreements, supporting a 4.7% dividend yield, with expected cash flow per share growth of 7% to 8% annually through 2030, providing ample capacity for continued dividend increases.
- Energy Infrastructure Expansion: Energy Transfer (ET), a master limited partnership, generates 90% of its earnings from stable fee-based revenue, boasting a 7.1% dividend yield, and plans to invest at least $5 billion in 2023 to expand its natural gas pipeline systems, with projected annual dividend growth of 3% to 5%.
- REIT Advantages: Realty Income (O) owns a diversified property portfolio, benefiting from a 4.9% monthly dividend yield supported by long-term net leases, having increased its dividend for 113 consecutive quarters, and is expected to continue expanding its asset base with billions in annual investments.
- Telecom Cash Flow: Verizon (VZ) anticipates generating $21.5 billion in free cash flow in 2023, approximately $10 billion above its annual dividend payments, enhancing its debt repayment capacity and strategic investment potential, while maintaining a 19-year dividend growth streak.
See More
Stable Growth Potential of High-Yield Stocks
- Energy Transition Investment: Energy Transfer plans to increase its high-yield payout by 3% to 5% annually, expecting to invest at least $5 billion in expansion projects to enhance its natural gas pipeline systems, thereby ensuring stable cash flow and dividend growth.
- Stability of REITs: Realty Income has increased its monthly dividend for 113 consecutive quarters, ensuring a 4.9% high-yield dividend through a diversified property portfolio and long-term net lease agreements, showcasing its strong cash flow and financial stability.
- Telecom Cash Flow: Verizon anticipates generating $21.5 billion in free cash flow this year, a 7% increase from 2025, enabling it to cover its 5.8% dividend while continuing to repay debt, further strengthening its financial capacity for strategic investments.
- Growth Potential in Clean Energy: Clearway Energy expects its cash flow per share to grow at a compound annual rate of 7% to 8% through 2030, supporting its 4.7% dividend while reinvesting stable cash flows to enhance future growth visibility.
See More
Energy Transfer's January Performance Analysis
- Unit Performance: In January, Energy Transfer's units appreciated by 11.9%, which, while below the energy sector's overall 14.4% increase, reflects the company's lower reliance on natural gas and crude oil prices as a midstream energy firm, thus providing relatively stable revenue.
- Dividend Growth: The company has raised its distributions for several consecutive quarters, recently increasing the payout from $0.3325 to $0.335 per unit, resulting in a current yield of 7.3%, significantly higher than the S&P 500's 1.2%, highlighting its attractiveness to income-focused investors.
- Cash Flow Status: In the first nine months of 2025, Energy Transfer generated $8.2 billion in adjusted distributable cash flow compared to $4.6 billion in distributions to unit holders, indicating ample cash flow to support its distribution payments.
- Investment Appeal: Given its stable cash flow and high dividend yield, Energy Transfer presents an attractive option for investors seeking stable income, and combined with potential price appreciation, owning the units could yield a favorable total return.
See More
Energy Transfer's January Performance Analysis
- Unit Performance: Energy Transfer's units appreciated by 11.9% in January, which, while below the energy sector's overall 14.4% gain, reflects the company's stability as a midstream operator less reliant on volatile commodity prices.
- Dividend Growth: The company has consistently raised its distributions each quarter, recently increasing the payout from $0.3325 to $0.335 per unit, resulting in an attractive yield of 7.3%, significantly higher than the S&P 500's 1.2%, appealing to income-focused investors.
- Cash Flow Status: In the first nine months of 2025, Energy Transfer generated $8.2 billion in adjusted distributable cash flow against $4.6 billion in distributions, indicating robust cash flow that supports its distribution policy and bolsters investor confidence.
- Market Outlook: Despite a 4.7% decline in unit price over the past year, the total return of 0.3% when factoring in dividends, along with potential price appreciation, positions Energy Transfer as a relatively stable investment in the energy sector, suitable for income-oriented investors.
See More
Investment Comparison: Energy Transfer vs. Enterprise Products Partners
- Financial Metrics Comparison: Energy Transfer boasts a current distribution yield of 7.1% with a coverage ratio of 1.8x, and while its leverage ratio stands at 4.0-4.5x, it remains within target range, indicating stable cash flow and dividend capacity, making it appealing for income-seeking investors.
- Growth Potential Analysis: Enterprise Products Partners is nearing the end of a multi-year capital deployment cycle initiated in 2022, with an expected investment of $2.5 billion to $2.9 billion in expansion projects this year, which will significantly boost its free cash flow and enhance future distribution capabilities.
- Expansion Plans: Energy Transfer plans to invest $5 billion to $5.5 billion in growth capital projects in 2023, with several major pipeline expansions set to enter commercial service by 2030, supporting its annual distribution growth of 3% to 5%.
- Investment Recommendation: While both are excellent income stock investments, Energy Transfer stands out as the better dividend investment this year due to its lower valuation and clearer long-term growth prospects, potentially yielding higher total returns in 2026 and beyond.
See More
Energy Transfer Starts Strong in 2026 with 14% Stock Price Increase
- Stock Price Surge: Energy Transfer's stock has risen approximately 14% as of now, indicating strong market confidence in its future growth, reflecting investor attraction to its forward yield of 7.2%.
- Project Progress: The Hugh Brison pipeline project in the Permian Basin is 75% complete, with phase one expected to come online by year-end, further enhancing the company's growth potential.
- Strong Financial Performance: In Q4, EBITDA increased by 8% year-over-year to $4.18 billion, benefiting from a favorable regulatory ruling on NGL pipeline pricing that contributed an additional $56 million, showcasing the company's competitive edge in pricing.
- Optimistic Outlook: The company raised its 2026 EBITDA forecast to a range of $17.45 billion to $17.85 billion, reflecting the positive impact of its subsidiary USA Compression's acquisition, with expected future distributions growing at a rate of 3% to 5%.
See More
High-Yield Stocks for Passive Income Growth
- Clean Energy Leadership: Clearway Energy (CWEN) secures stable cash flow through long-term power purchase agreements, supporting a 4.7% dividend yield, with expected cash flow per share growth of 7% to 8% annually through 2030, providing ample capacity for continued dividend increases.
- Energy Infrastructure Expansion: Energy Transfer (ET), a master limited partnership, generates 90% of its earnings from stable fee-based revenue, boasting a 7.1% dividend yield, and plans to invest at least $5 billion in 2023 to expand its natural gas pipeline systems, with projected annual dividend growth of 3% to 5%.
- REIT Advantages: Realty Income (O) owns a diversified property portfolio, benefiting from a 4.9% monthly dividend yield supported by long-term net leases, having increased its dividend for 113 consecutive quarters, and is expected to continue expanding its asset base with billions in annual investments.
- Telecom Cash Flow: Verizon (VZ) anticipates generating $21.5 billion in free cash flow in 2023, approximately $10 billion above its annual dividend payments, enhancing its debt repayment capacity and strategic investment potential, while maintaining a 19-year dividend growth streak.
See More
Stable Growth Potential of High-Yield Stocks
- Energy Transition Investment: Energy Transfer plans to increase its high-yield payout by 3% to 5% annually, expecting to invest at least $5 billion in expansion projects to enhance its natural gas pipeline systems, thereby ensuring stable cash flow and dividend growth.
- Stability of REITs: Realty Income has increased its monthly dividend for 113 consecutive quarters, ensuring a 4.9% high-yield dividend through a diversified property portfolio and long-term net lease agreements, showcasing its strong cash flow and financial stability.
- Telecom Cash Flow: Verizon anticipates generating $21.5 billion in free cash flow this year, a 7% increase from 2025, enabling it to cover its 5.8% dividend while continuing to repay debt, further strengthening its financial capacity for strategic investments.
- Growth Potential in Clean Energy: Clearway Energy expects its cash flow per share to grow at a compound annual rate of 7% to 8% through 2030, supporting its 4.7% dividend while reinvesting stable cash flows to enhance future growth visibility.
See More
Energy Transfer's January Performance Analysis
- Unit Performance: In January, Energy Transfer's units appreciated by 11.9%, which, while below the energy sector's overall 14.4% increase, reflects the company's lower reliance on natural gas and crude oil prices as a midstream energy firm, thus providing relatively stable revenue.
- Dividend Growth: The company has raised its distributions for several consecutive quarters, recently increasing the payout from $0.3325 to $0.335 per unit, resulting in a current yield of 7.3%, significantly higher than the S&P 500's 1.2%, highlighting its attractiveness to income-focused investors.
- Cash Flow Status: In the first nine months of 2025, Energy Transfer generated $8.2 billion in adjusted distributable cash flow compared to $4.6 billion in distributions to unit holders, indicating ample cash flow to support its distribution payments.
- Investment Appeal: Given its stable cash flow and high dividend yield, Energy Transfer presents an attractive option for investors seeking stable income, and combined with potential price appreciation, owning the units could yield a favorable total return.
See More
Energy Transfer's January Performance Analysis
- Unit Performance: Energy Transfer's units appreciated by 11.9% in January, which, while below the energy sector's overall 14.4% gain, reflects the company's stability as a midstream operator less reliant on volatile commodity prices.
- Dividend Growth: The company has consistently raised its distributions each quarter, recently increasing the payout from $0.3325 to $0.335 per unit, resulting in an attractive yield of 7.3%, significantly higher than the S&P 500's 1.2%, appealing to income-focused investors.
- Cash Flow Status: In the first nine months of 2025, Energy Transfer generated $8.2 billion in adjusted distributable cash flow against $4.6 billion in distributions, indicating robust cash flow that supports its distribution policy and bolsters investor confidence.
- Market Outlook: Despite a 4.7% decline in unit price over the past year, the total return of 0.3% when factoring in dividends, along with potential price appreciation, positions Energy Transfer as a relatively stable investment in the energy sector, suitable for income-oriented investors.
See More
Investment Comparison: Energy Transfer vs. Enterprise Products Partners
- Financial Metrics Comparison: Energy Transfer boasts a current distribution yield of 7.1% with a coverage ratio of 1.8x, and while its leverage ratio stands at 4.0-4.5x, it remains within target range, indicating stable cash flow and dividend capacity, making it appealing for income-seeking investors.
- Growth Potential Analysis: Enterprise Products Partners is nearing the end of a multi-year capital deployment cycle initiated in 2022, with an expected investment of $2.5 billion to $2.9 billion in expansion projects this year, which will significantly boost its free cash flow and enhance future distribution capabilities.
- Expansion Plans: Energy Transfer plans to invest $5 billion to $5.5 billion in growth capital projects in 2023, with several major pipeline expansions set to enter commercial service by 2030, supporting its annual distribution growth of 3% to 5%.
- Investment Recommendation: While both are excellent income stock investments, Energy Transfer stands out as the better dividend investment this year due to its lower valuation and clearer long-term growth prospects, potentially yielding higher total returns in 2026 and beyond.
See More
