Energy prices are surging amid ongoing conflict in Iran, with the Strait of Hormuz effectively closed and impacting roughly 20% of global petroleum supply. This has propelled energy stocks to new highs, notably Energy Transfer (ET), which has seen a 16% increase in 2026. As a master limited partnership (MLP), Energy Transfer offers a compelling 6.9% yield, significantly outperforming traditional income-generating assets like U.S. Treasuries and popular dividend ETFs.

The company’s business model, primarily based on contract fees, provides a stable revenue stream with minimal direct exposure to volatile commodity prices. In 2025, Energy Transfer reported $8.2 billion in distributable cash flow, with a conservative payout ratio of 55%, indicating a robust financial cushion for its distributions. Management aims for annual distribution increases of 3% to 5%, suggesting potential for continued growth.

For income-focused investors, Energy Transfer remains an attractive option, especially given its high yield and stable revenue structure in a turbulent energy market.

Source: fool.com