Energy Transfer (ET) is drawing attention for its attractive 6.7% dividend yield, significantly higher than the S&P 500’s 1.1%. While this yield positions ET favorably among dividend stocks, potential investors should conduct thorough due diligence on the company’s fundamentals, especially considering its past dividend cut during the pandemic due to cash conservation needs.
Recent performance indicates a positive trajectory for Energy Transfer, with Q1 2023 distributable cash flow reaching $2.7 billion, a 16.9% increase year-over-year, comfortably covering the $1.2 billion in dividends. The company has also demonstrated a commitment to increasing dividends, raising its quarterly payout consistently since 2021, with the latest increase announced in April.
For market professionals, Energy Transfer presents a compelling case for dividend-focused investment, especially given its recent cash flow strength and plans for pipeline investments. However, its historical volatility warrants close monitoring to ensure that the current favorable conditions persist.
Source: fool.com