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Energy Transfer LP (ET - Free Report) closed the most recent trading day at $20.45, moving +2.05% from the previous trading session. This change outpaced the S&P 500's 0.52% loss on the day. On the other hand, the Dow registered a loss of 1.24%, and the technology-centric Nasdaq decreased by 0.21%.

Heading into today, shares of the energy-related services provider had lost 1.43% over the past month, lagging the Oils-Energy sector's gain of 5.63% and the S&P 500's loss of 1.21%.

Market participants will be closely following the financial results of Energy Transfer LP in its upcoming release. The company plans to announce its earnings on November 3, 2026. On that day, Energy Transfer LP is projected to report earnings of $0.41 per share, which would represent year-over-year growth of 46.43%. Meanwhile, our latest consensus estimate is calling for revenue of $35.6 billion, up 78.41% from the prior-year quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.73 per share and a revenue of $122.42 billion, signifying shifts of +42.98% and +43.13%, respectively, from the last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Energy Transfer LP. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.12% higher within the past month. Energy Transfer LP is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Energy Transfer LP has a Forward P/E ratio of 11.57 right now. This represents a discount compared to its industry average Forward P/E of 14.7.

Meanwhile, ET's PEG ratio is currently 0.7. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Oil and Gas - Production Pipeline - MLB stocks are, on average, holding a PEG ratio of 1.59 based on yesterday's closing prices.

The Oil and Gas - Production Pipeline - MLB industry is part of the Oils-Energy sector. Currently, this industry holds a Zacks Industry Rank of 27, positioning it in the top 11% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.82% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Energy Transfer LP (ET - Free Report) Energy Transfer LP is a diversified midstream partnership with operations spanning natural gas, NGLs, crude oil, refined products, terminalling, storage and related services in the United States. Its asset base includes a large network of pipelines and associated infrastructure, supported by gathering, processing, fractionation and logistics capabilities. The partnership also owns interests in Sunoco LP and USA Compression Partners, LP.

ET is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 11.57; value investors should take notice.

Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.03 to $1.73 per share. ET boasts an average earnings surprise of +0.4%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, ET should be on investors' short list.

DALLAS--(BUSINESS WIRE)--Energy Transfer LP (Texas Stock Exchange, TXSE: ET) today announced an increase in its quarterly cash distribution to $0.3425 per Energy Transfer common unit ($1.37 on an annualized basis) for the third quarter ended September 30, 2026. This cash distribution per Energy Transfer common unit will be paid on November 19, 2026 to unitholders of record as of the close of business on November 6, 2026, and is an increase of more than 3 percent as compared to the third quarter.

In the latest trading session, Energy Transfer LP (ET - Free Report) closed at $19.90, marking a -1.73% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 0.33% for the day. Meanwhile, the Dow experienced a rise of 1.08%, and the technology-dominated Nasdaq saw an increase of 0.08%.

The energy-related services provider's stock has climbed by 0% in the past month, falling short of the Oils-Energy sector's gain of 5.67% and the S&P 500's gain of 1.41%.

Investors will be eagerly watching for the performance of Energy Transfer LP in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on November 3, 2026. The company is expected to report EPS of $0.41, up 46.43% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $35.6 billion, up 78.41% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.73 per share and revenue of $122.42 billion, indicating changes of +42.98% and +43.13%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Energy Transfer LP. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.52% fall in the Zacks Consensus EPS estimate. Energy Transfer LP is currently sporting a Zacks Rank of #3 (Hold).

The Oil and Gas - Production Pipeline - MLB industry is part of the Oils-Energy sector. With its current Zacks Industry Rank of 56, this industry ranks in the top 23% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

Morgan Stanley (NYSE: MS) today announced its third quarter 2026 financial results. The results are now available on the Firm’s Investor Relations website at www.morganstanley.com/about-us-ir/earnings-releases. The results will be filed on a Form 8-K with the Securities and Exchange Commission (SEC) on October 14, 2026, which will be available on the SEC’s website at www.sec.gov.

A conference call to discuss the results will be held today at 9:30 a.m. (ET). The call will be available at www.morganstanley.com or by dialing 1-844-886-2200 (domestic) and 1-646-307-1096 (international); the passcode is 400700. Playback will be available via webcast on our website.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20261014683034/en/

The S&P 500 index (^GSPC -0.10%) is sitting near all-time highs, offering dividend investors a skinny little 1% yield. That's not a very attractive income stream if you are trying to live off the dividends your portfolio generates. Rising interest rates and bond yields are pushing investors toward bonds for income, but that may actually be creating a stock buying opportunity for investors who think long term.

Which is why dividend lovers will want to consider high-yielding options like Energy Transfer (ET -0.64%), Realty Income (O +0.79%), and PepsiCo (PEP +0.94%), with yields of up to 6.5%. And, notably, each one has been increasing its dividend. Here's a quick look at all of them.

Image source: Getty Images.

PepsiCo is working through some headwinds PepsiCo is one of the world's largest consumer staples companies. It makes snacks, beverages, and packaged food products that are sold globally. It has industry-leading brands, with marketing, distribution, and innovation strengths that few can match. But, it is currently working through a difficult period, with inflation increasing operating costs and belt-tightening consumers pressuring sales. The company is working to better align with consumers, something it has done many times over the last 54 years.

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71/100

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If 54 years seems oddly specific, it is. That's the number of years PepsiCo has increased its dividend, making it a Dividend King. The headwinds the company faces today, including rising interest rates and bond yields, aren't really unusual, and PepsiCo has survived such headwinds before while continuing to reward investors. However, Wall Street is deeply negative on the stock, pushing its yield to a historically high 4.7%. If you have the fortitude to buy while others are selling and hold for five years or more, PepsiCo could turn out to be a great income opportunity at today's prices.

Realty Income has advantaged access to capital Realty Income's dividend yield is an even higher 6%. The real estate investment trust's (REIT's) shares are coming under extreme pressure as interest rates and bond yields rise, since it uses debt to finance its property purchases. That's a real issue, but one that is likely to be more of an opportunity than a long-term threat. Property markets will eventually adjust to higher rates, allowing buyers to make profitable investments. If they don't, property markets will seize up, a situation that would be unlikely to last very long.

Realty Income benefits from being the largest net-lease REIT (it owns over 15,500 properties) with a globally diversified portfolio (spread across North America and Europe). It also has an investment-grade-rated balance sheet. These facts provide it with easy access to capital markets and the ability to issue relatively low-cost debt. So, even during this difficult period, it has an advantage over its smaller peers.

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82/100

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As a long-term investor, you benefit from Realty Income's slow and steady growth via regular dividend increases. At this point, the monthly pay dividend has been increased for 31 consecutive years. It could be a reliable, foundational investment for even the most conservative dividend investor.

Energy Transfer has repositioned itself for the future Energy Transfer and its lofty 6.5% yield require a bit more risk tolerance. It cut its dividend in half in 2020 to reduce leverage and shift toward a slow, steady distribution growth model. Some investors may prefer to avoid a business that just recently had a distribution cut. However, the distribution is growing again, with a target of 3%-5% annual increases.

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That said, Energy Transfer is one of the largest midstream businesses in North America. It charges fees for the use of its energy infrastructure assets, so the volume of energy flowing through its system is more important than energy prices. With a stronger financial position, it has proven to be a reliable source of income during a volatile period for the energy sector. If you can overlook the 2020 distribution cut, holding Energy Transfer for five years or longer could be a good way to gain exposure to the energy sector without worrying about oil price volatility.

Position your dividend portfolio for the long term Rising rates and yields are putting pressure on dividend stocks as bonds look more attractive. But bonds can't grow like a business; they are set obligations with static income streams. This is why the sell-off in dividend stocks could be a great opportunity for investors who think long term. Right now, PepsiCo, Realty Income, and Energy Transfer all offer lofty income streams that are very likely to be even more attractive five years from now than they are today, thanks to regular dividend increases.

The rapid growth of the cloud and AI markets is driving natural gas prices higher, since U.S. data centers get over 40% of their electricity from natural gas. That's been a boon for natural gas producers and the midstream pipeline companies that transport the gas.

But as winter approaches, natural gas prices will likely climb even higher as temperatures drop and heating costs rise. To profit from that shift, investors should consider investing $2,000 (or more) in these two top pipeline stocks: Energy Transfer (ET -1.02%) and The Williams Companies (WMB +0.46%).

Image source: Getty Images.

Energy Transfer Energy Transfer operates more than 140,000 miles of pipeline across 44 states. It transports crude oil, natural gas, natural gas liquids (NGL), and other refined products through its pipelines, and exports natural gas (LNG) through its marine export terminals.

Roughly 30% of all natural gas produced in the U.S. flows through Energy Transfer's pipelines. It typically generates around 40% of its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from its natural gas assets. That percentage will increase after it closes its $2.6 billion acquisition of Vaquero Midstream later this year.

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Energy Transfer is a master limited partnership (MLP), which combines its own income with a return of capital to pay more tax-efficient distributions than regular corporations. That's why it pays a high forward yield of 6.6%. Those payments only consumed about half of its distributable cash flow (DCF) over the past few years, so it has plenty of room to raise its payout.

However, investors in MLPs must file an extra K-1 form to report that income every year. If you don't mind that extra work, it still looks like a bargain at 12 times this year's earnings per unit.

The Williams Companies The Williams Companies operates over 32,000 miles of pipeline in 24 states. It's smaller than Energy Transfer, but it mainly transports natural gas and NGLs. It owns Transco, the largest natural gas pipeline in the U.S, which connects the Gulf Coast to the Atlantic Seaboard.

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Williams transports about a third of all natural gas produced in the U.S., making it a more focused "pure play" on natural gas than Energy Transfer and many of its industry peers. Williams is also structured as a regular C-corporation rather than an MLP, which might make it more appealing to investors who don't want to deal with the extra tax paperwork.

Williams pays a forward dividend yield of 2.9%, which may seem low relative to other pipeline stocks, but its trailing payout ratio of 82% leaves plenty of room for future hikes. It isn't a screaming bargain at 27 times forward earnings, but its direct exposure to the booming natural gas market -- without the noise of crude oil -- could justify that higher valuation.

Chickasaw Capital Management LLC lowered its stake in shares of Energy Transfer LP (NYSE:ET – Free Report) by 1.3% in the third quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The firm owned 15,164,014 shares of the pipeline company’s stock after selling 197,032 shares during the period. Energy Transfer accounts for about 10.7% of Chickasaw Capital Management LLC’s investment portfolio, making the stock its 3rd biggest holding. Chickasaw Capital Management LLC owned approximately 0.44% of Energy Transfer worth $299,793,000 as of its most recent filing with the Securities & Exchange Commission.

Several other hedge funds and other institutional investors have also bought and sold shares of ET. Alps Advisors Inc. raised its position in shares of Energy Transfer by 8.0% in the 4th quarter. Alps Advisors Inc. now owns 83,843,087 shares of the pipeline company’s stock worth $1,382,573,000 after acquiring an additional 6,192,066 shares in the last quarter. Mizuho Markets Americas LLC bought a new stake in Energy Transfer during the first quarter valued at about $61,760,000. SCS Capital Management LLC boosted its position in Energy Transfer by 1,859.8% during the second quarter. SCS Capital Management LLC now owns 1,942,908 shares of the pipeline company’s stock valued at $37,148,000 after purchasing an additional 1,843,771 shares in the last quarter. Bank of America Corp DE grew its stake in Energy Transfer by 5.7% in the first quarter. Bank of America Corp DE now owns 30,956,358 shares of the pipeline company’s stock valued at $597,458,000 after purchasing an additional 1,656,609 shares during the last quarter. Finally, Empirical Finance LLC grew its stake in Energy Transfer by 86.8% in the first quarter. Empirical Finance LLC now owns 1,404,756 shares of the pipeline company’s stock valued at $27,112,000 after purchasing an additional 652,711 shares during the last quarter. Institutional investors own 38.22% of the company’s stock.

Analyst Upgrades and Downgrades Several analysts have commented on ET shares. TD Cowen reissued a “buy” rating and set a $25.00 price target (up from $24.00) on shares of Energy Transfer in a research report on Monday, August 10th. Wall Street Zen raised shares of Energy Transfer from a “hold” rating to a “buy” rating in a research report on Saturday, August 8th. JPMorgan Chase & Co. boosted their price objective on shares of Energy Transfer from $24.00 to $25.00 and gave the stock an “overweight” rating in a research note on Friday, September 4th. Morgan Stanley increased their target price on shares of Energy Transfer from $23.00 to $25.00 and gave the company an “equal weight” rating in a research report on Tuesday, August 18th. Finally, Capital One Financial assumed coverage on shares of Energy Transfer in a research note on Tuesday, September 22nd. They issued an “overweight” rating and a $26.00 target price for the company. Two analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus target price of $24.36.

View Our Latest Research Report on Energy Transfer Energy Transfer Stock Down 1.3% Energy Transfer stock opened at $20.48 on Thursday. The stock has a 50-day moving average of $20.90 and a two-hundred day moving average of $19.98. The company has a current ratio of 1.16, a quick ratio of 0.94 and a debt-to-equity ratio of 1.45. Energy Transfer LP has a one year low of $16.18 and a one year high of $21.84.

Energy Transfer (NYSE:ET – Get Free Report) last issued its quarterly earnings results on Tuesday, August 4th. The pipeline company reported $0.59 earnings per share for the quarter, topping the consensus estimate of $0.38 by $0.21. Energy Transfer had a return on equity of 11.55% and a net margin of 4.87%.The business had revenue of $34.33 billion during the quarter, compared to the consensus estimate of $27.71 billion. During the same quarter last year, the company earned $0.32 earnings per share. The company’s quarterly revenue was up 78.4% on a year-over-year basis. Equities research analysts forecast that Energy Transfer LP will post 1.73 earnings per share for the current fiscal year.

Energy Transfer Increases Dividend The business also recently announced a quarterly dividend, which was paid on Wednesday, August 19th. Shareholders of record on Friday, August 7th were given a dividend of $0.34 per share. The ex-dividend date of this dividend was Friday, August 7th. This represents a $1.36 annualized dividend and a yield of 6.6%. This is a boost from Energy Transfer’s previous quarterly dividend of $0.3375. Energy Transfer’s payout ratio is presently 92.52%.

Trending Headlines about Energy Transfer Here are the key news stories impacting Energy Transfer this week:

Positive Sentiment: Vaquero acquisition expands midstream footprint: Energy Transfer agreed to acquire Vaquero Midstream for approximately $2.625 billion, including $1.95 billion in cash and about 33.3 million newly issued ET common units. The transaction is expected to close in the fourth quarter and should add assets and volumes to ET’s operations. Reuters article Positive Sentiment: Analyst sees meaningful upside: A Seeking Alpha analysis resumed coverage with a Buy rating and a $26 price target, citing expected strong volume growth, robust downstream utilization and ET’s roughly 90% fee-based business model. The analysis forecasts mid-single-digit revenue growth and margin expansion in fiscal 2027, supported in part by rising power demand from data centers. Seeking Alpha article Positive Sentiment: Income appeal remains a key support: Coverage continues to highlight ET’s high distribution yield, diversified assets and predominantly fee-based cash flows. Those characteristics may attract income-oriented investors, particularly as the company offers exposure to energy infrastructure without taking on as much direct commodity-price risk. 247WallSt article Neutral Sentiment: Acquisition economics will be watched: The Vaquero deal could be accretive if acquired volumes and cash flow meet expectations, but ET must deploy $1.95 billion of cash while issuing units to fund part of the purchase. Investors will likely focus on leverage, integration progress and the effect of unit issuance on per-unit cash flow. Negative Sentiment: Yield competition is increasing: With the 10-year Treasury yielding 5.31%, ET’s distribution must offer sufficient compensation for the additional business and financing risks of a pipeline partnership. Higher risk-free yields could limit valuation expansion for high-yield stocks, even with attractive distributions. Insider Activity at Energy Transfer In related news, Director James Perry purchased 12,359 shares of the firm’s stock in a transaction on Friday, August 7th. The stock was acquired at an average price of $20.23 per share, with a total value of $250,022.57. Following the completion of the acquisition, the director owned 208,046 shares in the company, valued at approximately $4,208,770.58. This represents a 6.32% increase in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this link. Also, Director Kelcy L. Warren acquired 647,968 shares of the stock in a transaction dated Wednesday, August 19th. The shares were bought at an average price of $21.26 per share, with a total value of $13,775,799.68. Following the completion of the purchase, the director directly owned 147,901,879 shares of the company’s stock, valued at approximately $3,144,393,947.54. This trade represents a 0.44% increase in their position. The SEC filing for this purchase provides additional information. In the last three months, insiders have acquired 1,012,359 shares of company stock worth $21,513,543. 3.28% of the stock is owned by insiders.

Energy Transfer Profile (Free Report)

Energy Transfer LP is a diversified energy infrastructure company headquartered in Dallas, Texas. The partnership owns and operates a broad network of pipelines, processing facilities, storage assets and terminals that support the movement of natural gas, natural gas liquids, crude oil and refined products across the United States.

The company’s operations include gathering and processing natural gas, transporting and storing natural gas and NGLs, fractionating NGLs into component products, and transporting crude oil and refined products.

Featured Articles Five stocks we like better than Energy Transfer Skydance Just Became a Media Giant—With an $80 Billion Debt Load Could Velo3D Be the Next Defense Buyout Target? Penguin Solutions Is Soaring as AI Memory Demand Explodes Alphabet’s Chart Is Coiling—and the Fundamentals May Be Ready to Back It Up Want to see what other hedge funds are holding ET? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Energy Transfer LP (NYSE:ET – Free Report).

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Primaris Real Estate Investment Trust(“Primaris” or the “Trust”) (TSX: PMZ.UN) is hosting its Investor Day today, in Montreal, Quebec, where its leaders

6.32K Followers

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in ET over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

I initially invested in Energy Transfer (ET -1.35%), one of the largest midstream companies in the U.S., about 18 months ago. I've increased my position several times since then, and the stock now accounts for 4.2% of my portfolio with a 23% gain.

Many investors buy Energy Transfer for its high forward yield of 6.6%, which is still higher than the 10-Year Treasury's 5.3%. That distribution is easily sustainable because it consumes only around half of its distributable cash flow (DCF) each year. That's also one of my top reasons for buying Energy Transfer, but there are plenty of other reasons to accumulate this pipeline stock.

Image source: Getty Images.

It's resistant to volatile commodity prices Energy Transfer operates over 140,000 miles of pipeline in 44 states. It delivers crude oil, natural gas, natural gas liquids, and other refined products through its pipelines and marine export terminals. As a midstream company, it simply charges downstream and upstream companies "tolls" to use its infrastructure, so it's well insulated from volatile commodity prices.

It's exposed to the cloud and AI boom U.S. data centers get more than 40% of their grid electricity from natural gas, according to the International Energy Agency (IEA). Energy Transfer's pipelines transport about 30% of all the natural gas produced in the United States, and it generates roughly 40% of its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from its natural gas assets. Therefore, the ongoing expansion of the power-hungry cloud infrastructure and AI markets should boost Energy Transfer's natural gas volumes for the foreseeable future.

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It's more tax-efficient than other high-yield investments Energy Transfer is a master limited partnership (MLP), which shields it from corporate taxes. MLPs also blend a return of capital with their own income in their distributions, so you'll only pay federal and state taxes on the income (unit depreciation) portion of those payments.

In other words, Energy Transfer's yield is more tax-efficient than standard C-corporations paying similar yields. By comparison, The Williams Companies (WMB +2.05%) -- another major pipeline player with even more exposure to the natural gas and AI markets -- pays corporate taxes to the government and fully taxable dividends to its investors because it isn't an MLP.

It's undervalued relative to its growth Lastly, Energy Transfer looks undervalued relative to its growth potential. From 2025 to 2028, analysts expect Energy Transfer's earnings per unit (EPU) to grow at a 14% CAGR. At $20, it still looks like a bargain at 12 times this year's EPU.

That low valuation -- along with its high yield, wide moat, and exposure to the AI boom -- makes Energy Transfer a safe stock to buy and hold even as rising Treasury yields rattle the market. It's not an exciting investment, but it will help you sleep better at night.

DALLAS--(BUSINESS WIRE)--Energy Transfer LP (Texas Stock Exchange, TXSE: ET) and Vaquero Midstream LLC (Vaquero) announced today that the parties have entered into a definitive agreement pursuant to which Energy Transfer will acquire Vaquero in a bolt-on transaction valued at approximately $2.625 billion. The transaction consideration will consist of $1.95 billion in cash and approximately 33.3 million newly issued Energy Transfer common units. The acquisition is expected to close in the 4th qu.

Energy Transfer (ET -0.12%) is one of the largest U.S.-listed master limited partnerships (MLPs) specializing in the ownership of pipelines and other midstream energy assets. Based on current prices, Energy Transfer has a forward distribution yield of 6.64%.

In other words, add up its quarterly cash distributions and divide by the current stock price, and you'll get approximately this figure. Considering this, let's run the numbers and see how many shares of this pipeline stock you'd need to own in order to earn $250 monthly.

Image source: Getty Images.

Building a $250-per-month income stream from Energy Transfer stock Considering the complexities of MLPs and taxation, we will focus on a gross dividend income of $250 per month from an Energy Transfer position, for purposes of our calculation. A monthly payout of $250 comes out to $3,000 per year. Energy Transfer pays $1.36 per share in annual distributions.

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20.70

Divide $3,000 by $1.36, and you get 2,205 shares, worth around $45,136 based on Energy Transfer's current stock price. From this position, you'd generate around $2,998.80 in dividend income annually, or just under $250 per month.

The case for reinvesting your distributions If you have just over $45,000, buying Energy Transfer is a great way to get an upper-single-digit forward yield from your investment. Besides the relatively high forward distribution rate, this MLP has a long track record of steadily raising its payout by several percentage points each year, which helps ensure your investment keeps up with inflation.

However, what if, instead of spending your Energy Transfer distributions or investing them elsewhere, you chose to reinvest cash distributions into more MLP units? Over the past five years, Energy Transfer has generated total returns, or price appreciation plus distributions, totaling 204% (24.9% annually), versus just 93% (14% annually) for the S&P 500 (^GSPC +0.47%) . Although total returns can vary over time, this figure alone demonstrates the compounding potential of this stock.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of ET either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

"Once bitten, twice shy" is a common idiom that refers to a person who was hurt or disappointed once being much more cautious or hesitant to try something again (it's the title of a song originally released in 1975 that gained some commercial success when it was covered in 1989).

"Once bitten, twice shy" is also an idiom common to dividend investors, who, after enduring one dividend cut from a company, are reluctant to allocate their hard-earned capital to those shares again.

So it's understandable that Energy Transfer's (ET +1.84%) 2020 payout cut, one largely brought on by the need to conserve capital during the coronavirus pandemic, still weighs on some equity income investors.

Following a 2020 cut, Energy Transfer's dividend is again growing and safe. Image source: Getty Images.

Investors should remember that with any dividend stock, there's no such thing as a 100% guarantee against possible cuts. Several now-former Dividend Kings, or firms with dividend-increase streaks of at least 50 years, have been permanently shunned for paring payouts. For investors considering Energy Transfer, the good news is that a 2020 repeat isn't imminent and appears unlikely in the long term.

Mending dividend fences Following the October 2020 payout reduction, Energy Transfer's annualized dividend slumped to $0.61 a share, or half the prior distribution. Fortunately, that didn't last long. By the fourth quarter of 2021, the midstream company's annualized dividend had risen to $0.70 per share, marking the beginning of a renewed commitment to payout growth.

Sporting a yield of 6.8%, Energy Transfer now has a streak of dividend increases spanning 19 quarters, or almost five years. No, that doesn't erase a prior distribution cut, but that run goes a long way toward restoring investors' confidence that this pipeline operator is committed to payout growth and safety.

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Speaking of safety, the data confirm it's a long shot that Energy Transfer will be a dividend offender again anytime soon. At the end of the second quarter, the energy company had a distributable cash flow (DCF) coverage ratio of 2.2, implying the dividend isn't a burden. DCF is an important metric because it measures pipeline companies' cash generation relative to how much of that cash is paid out as dividends.

Investors who are experienced with master limited partnerships (MLPs) such as Energy Transfer know that, at a minimum, coverage ratios below 1 are potential warning signs. In contrast, ratios above one are the place to be. Energy Transfer more than doubles the preferred coverage ratio.

Debt trending the right way One of the hallmarks of companies that deliver dividend dismay is high debt. Midstream is a capital-intensive industry, so it's not uncommon for operators to carry liabilities that appear significant. To that end, what matters are the debt ratios.

Specific to Energy Transfer, its desired net debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) is 4x to 4.5x and stood at 4.4x at the end of last year. It could decline into the high 3s this year before stabilizing in the mid-3s. In plain English, the company's debt ratio is heading in the right direction.

That's vital information for investors because not only does Energy Transfer's debt-reduction progress free up cash to grow the business or pursue deals, but it's also potentially supportive of better credit ratings and long-term payout growth.

In the latest close session, Energy Transfer LP (ET - Free Report) was up +1.67% at $20.10. The stock's change was more than the S&P 500's daily gain of 0.2%. Elsewhere, the Dow gained 0.04%, while the tech-heavy Nasdaq added 0.04%.

The energy-related services provider's stock has dropped by 8.22% in the past month, falling short of the Oils-Energy sector's loss of 2.32% and the S&P 500's loss of 0.35%.

The investment community will be closely monitoring the performance of Energy Transfer LP in its forthcoming earnings report. The company is expected to report EPS of $0.4, up 42.86% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $35.6 billion, showing a 78.41% escalation compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.73 per share and a revenue of $122.42 billion, indicating changes of +42.98% and +43.13%, respectively, from the former year.

Any recent changes to analyst estimates for Energy Transfer LP should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.76% higher. Currently, Energy Transfer LP is carrying a Zacks Rank of #3 (Hold).

With respect to valuation, Energy Transfer LP is currently being traded at a Forward P/E ratio of 11.43. This indicates a discount in contrast to its industry's Forward P/E of 13.42.

Also, we should mention that ET has a PEG ratio of 0.66. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Oil and Gas - Production Pipeline - MLB industry had an average PEG ratio of 1.88 as trading concluded yesterday.

The Oil and Gas - Production Pipeline - MLB industry is part of the Oils-Energy sector. This industry, currently bearing a Zacks Industry Rank of 59, finds itself in the top 24% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

Stocks with dividend yields over 5% aren't automatically good investments, especially if the investor expects to hold them over the next five years. A high yield can signal risk, and investors might see both their dividend and capital shrinking day by day if they make a bad choice.

But when strong Wall Street approval backs a high yield, the framing changes. These companies offer both substantial income and strong potential for capital appreciation, a combination that should make long-term investors happy.

So let's look at three companies that embody both high yields and strong analyst scores and why they deserve a spot in their portfolio.

Image source: Getty Images.

Energy Transfer: A high-yield pipeline stock with fee-based cash flow Energy Transfer (ET -0.58%) is a midstream energy infrastructure company, meaning it owns and operates pipelines, storage facilities, and processing plants that move energy from power producers to refiners and distributors. One benefit of a midstream company is that it's largely immune to the ebb and flow of commodity prices.

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In this case, Energy Transfer earns roughly 90% of its revenue from fees. And out of that, the company pays a $1.36 forward annual dividend, or about a 7% yield.

Wall Street is quite bullish on Energy Transfer. A consensus among 20 analysts rates the stock a "strong buy," with a $28 high price target suggesting nearly 39% upside. That kind of bullish backdrop makes Energy Transfer a strong income anchor, but it's not the only high-yield name with extra upside built in.

Clearway Energy offers a high yield with real AI upside Clearway Energy (CWEN +0.38%), on the other hand, owns and operates a portfolio of renewable energy and power generation assets, sitting on the opposite end of the energy spectrum from Energy Transfer. It's not a consumer-facing business either, which is probably why some investors have never heard of it. Instead, the company sells its electricity under long-term power purchase agreements (PPAs) with utilities and large corporations.

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Moneyball Superscore

64/100

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In this context, "large corporations" refers to artificial intelligence hyperscalers such as Alphabet, Microsoft, and another unnamed but "prominent hyperscaler." That's a clear pathway to AI growth, and analysts are starting to notice. The stock has a solid "strong buy" rating based on a consensus among 12 analysts, while a $58 high target price represents a 95% potential upside if reached.

Of course, the stock also pays a $1.90 forward annual dividend, which translates to about a 7% yield at today's prices. That combination of income, growth, and analyst support makes Clearway Energy a compelling pick.

International Paper pairs a high dividend yield with a strong outlook The last name on this list has nothing to do with the energy sector at all, which only adds to its appeal. International Paper Company (IP +0.81%) makes fiber-based packaging, mainly corrugated boxes and the containerboard used to make them.

Its main business, industrial packaging, produces fiber-based packaging that protects goods and facilitates worldwide commerce. In fact, it's one of the world's largest forestry and paper companies, with a strong presence in Europe thanks to its acquisition of DS Smith.

More importantly for income investors, the company pays a $1.85 forward annual dividend, which translates to about a 5% yield. But of course, the good news doesn't stop there. Wall Street rates International Paper a "strong buy" based on 13 analyst ratings, with a $62 price target implying 77% potential upside if reached.

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51/100

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With all three offering something different, the real question is which one fits an investor's particular goals. All three provide steady cash flow, real Wall Street backing, and high upside potential, making them ideal choices for those looking to hold high-yield stocks over the next five years.

Energy Transfer got whipped up in a recent selloff as mounting headwinds turned into a perfect storm last week. Project Jupiter's snags and permitting delays are becoming front and center, as the force majeure notification has deepened execution delays. However, the market hasn't ignored such risks. ET's valuation, at 8.4x forward EBITDA and a forward distribution yield below 7%, is pressured by surging long-term bond yields. De-rating has already occurred.

Among individual stocks, Energy Transfer (ET -1.25%) is my largest position. I first bought the stock back in 2019, and my position became significantly larger when the company acquired another of my largest holdings, Crestwood Equity Partners, back in November 2023. Despite the outsize position, I have never sold any shares (technically units) in the master limited partnership (MLP).

Here are three reasons why Energy Transfer remains one of my favorite stocks today.

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A midstream empire In the past, Energy Transfer has gotten a bad rap for focusing more on empire building than on unitholders. However, that empire building has created one of the largest and most powerful midstream companies in the country and one uniquely positioned to benefit from the current AI data center build-out.

In fact, the company would actually be even better positioned today if its general partner hadn't walked away from a $33 billion merger with Williams Companies back in 2016. Williams has become an $87 billion market cap company today and owns one of the most valuable natural gas pipeline systems in the country with Transco. If the deal has closed, Energy Transfer would be the unquestioned leader in natural gas transportation with takeaway capacity from both Appalachia and the Permian.

Nonetheless, the company's strong position in the Permian -- the U.S.'s most prolific oil basin and home to some of the country's cheapest natural gas -- has given it a large backlog of high-return growth projects. The company plans to spend up to $5.9 billion on growth projects this year with long-term locked-in commitments at attractive five- to six-times earnings before interest, taxes, depreciation, and amortization (EBITDA) build rates. That's a very attractive return for a pipeline company, and positions it to be one of the fastest-growing companies among midstream MLPs in the coming years.

Image source: The Motley Fool.

A cheap valuation While Energy Transfer has some of the best growth prospects in the midstream space, it also has the cheapest valuation among midstream MLPs. Midstream companies are typically valued based on an enterprise value (EV)-to-EBITDA basis. This is because they carry a fair amount of debt, which gets captured in their enterprise value, while EBITDA captures their current earnings power while stripping away non-cash depreciation costs.

On this basis, Energy Transfer trades at a forward EV-to-EBITDA ratio of 8.3. That's actually the cheapest valuation among pipeline MLPs by far, despite its generally stronger growth outlook.

ET EV to EBITDA (Forward) data by YCharts

Notably, it's also inexpensive on a historical basis. Between 2011 and 2016, midstream MLPs traded at an average EV-to-EBITDA ratio of 13.7, despite having worse balance sheets and often unfavorable incentive distribution rights (IDRs) under the industry's old model.

A safe, attractive, and growing distribution In addition to its valuation and growth prospects, a third attraction about Energy Transfer is its robust and growing distribution. The stock currently carries a 6.7% yield, while it plans to grow its distribution at a 3% to 5% yearly pace going forward. It has increased its distribution for 19 straight quarters.

Energy Transfer's distribution is well covered by its distribution cash flow (DCF), which is its operating cash flow minus its maintenance capex. Last quarter, its DCF coverage ratio was a robust 2.2. The company has also done a nice job reducing leverage since it got a little over its skis back in 2020. At that time, it cut its payout in half to reduce leverage, which it quickly accomplished, and has since grown its distribution to well above pre-cut levels.

In addition, about 90% of Energy Transfer's EBITDA comes from fee-based businesses that are not impacted by commodity prices or spreads. However, it has frequently been able to take advantage of energy market dislocations to generate bonus cash flow. It also has a high percentage of take-or-pay contracts, which adds to visibility.

Overall, the combination of growth, a high yield, and an attractive valuation makes Energy Transfer one of my favorite stocks to own.

Energy Transfer LP (ET - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this energy-related services provider have returned -4.9%, compared to the Zacks S&P 500 composite's +0.7% change. During this period, the Zacks Oil and Gas - Production Pipeline - MLB industry, which Energy Transfer LP falls in, has lost 2.7%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For the current quarter, Energy Transfer LP is expected to post earnings of $0.40 per share, indicating a change of +42.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.9% over the last 30 days.

The consensus earnings estimate of $1.73 for the current fiscal year indicates a year-over-year change of +43%. This estimate has changed +1.8% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $1.7 indicates a change of -1.8% from what Energy Transfer LP is expected to report a year ago. Over the past month, the estimate has remained unchanged.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Energy Transfer LP.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Energy Transfer LP, the consensus sales estimate for the current quarter of $35.6 billion indicates a year-over-year change of +78.4%. For the current and next fiscal years, $122.42 billion and $129.83 billion estimates indicate +43.1% and +6.1% changes, respectively.

Last Reported Results and Surprise HistoryEnergy Transfer LP reported revenues of $34.33 billion in the last reported quarter, representing a year-over-year change of +78.4%. EPS of $0.59 for the same period compares with $0.32 a year ago.

Compared to the Zacks Consensus Estimate of $31.09 billion, the reported revenues represent a surprise of +10.43%. The EPS surprise was +51.28%.

Over the last four quarters, the company surpassed EPS estimates just once. The company topped consensus revenue estimates just once over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Energy Transfer LP is graded A on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Energy Transfer LP. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Interactive Brokers Group, Inc. (Nasdaq: IBKR) plans to announce its third quarter financial results on Thursday, October 15, 2026, in a release that will be issued at approximately 4:00 pm (ET). The press release will also be available on the company's website, www.interactivebrokers.com/ir.

A conference call to discuss the company's results will be held at 4:30 pm (ET) on that day, October 15, 2026.

Members of the public who would like to listen to the conference call should register here to obtain the dial-in details. The dial-in number should be dialed approximately ten minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the Interactive Brokers website, www.interactivebrokers.com/earnings.

About Interactive Brokers Group, Inc.:
Interactive Brokers Group, Inc. (NASDAQ: IBKR) is a member of the S&P 500. Its affiliates provide automated trade execution and custody of securities, commodities, foreign exchange, and prediction markets around the clock on over 170 markets in numerous countries and currencies from a single unified platform to clients worldwide. We serve individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation have enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Interactive Brokers has consistently earned recognition as a top broker, garnering multiple awards and accolades from respected industry sources such as Barron's, Investopedia, Stockbrokers.com, and many others.

Follow Interactive Brokers on social media: Facebook, Instagram, LinkedIn, Reddit, X (Twitter), TikTok, YouTube.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260924921911/en/

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

Click for the complete disclosure

Nearly a year ago, Energy Transfer NYSE: ET announced a change in strategy that might have looked like a retreat. Today, it looks a lot less like one.

The diversified midstream energy partnership has seen its distributable cash flow soar, its earnings jump, revenue rise 79%, and its dividend yield hit above 6%.

The new strategy has worked. Investors, however, need a closer look before jumping in to ride the good news.

Get Energy Transfer alerts:

A Strategic Shift Pays OffEnergy Transfer Today

ET

Energy Transfer

$20.43 +0.04 (+0.17%)

As of 03:57 PM Eastern

This is a fair market value price provided by Massive. Learn more.

$16.18▼

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13.91

$24.36

In December 2025, after 12 years of extended effort, Energy Transfer announced it was killing the project that was supposed to define its next decade. It would no longer pursue a major liquefied natural gas (LNG) export terminal in Louisiana. Instead, the company said, it would redirect capital toward its pipeline backlog.

For its most recent quarter, reported Aug. 4, the move clearly paid off. The limited partnership announced that revenue cleared consensus by a wide margin as it rose to $34.3 billion compared with $19.2 billion a year ago. Net income nearly doubled to $2.03 billion from $1.09 billion a year ago.

On an adjusted basis, EBITDA came in at roughly $5.07 billion, up sharply from $3.87 billion a year earlier. Net income per common unit hit 59 cents, blowing past the 39 cents that analysts had modeled.

Overall, quarterly results were remarkable as the company said volumes nearly across the board set records during the three months, with NGL transportation up 13%, NGL exports 25% higher, and crude oil transportation up 4%.

Confident in the trend, management raised full-year adjusted EBITDA guidance to a range of $18.8 billion to $19.1 billion, and analysts have since raised their own earnings estimates for the year in response.

Cash Flow Fuels a Growing PayoutBeyond the impressive cumulative results and more important to unitholders, distributable cash flow attributable to partners rose to approximately $2.6 billion from $1.96 billion.

For unitholders, the payout remains the central attraction. In July, the partnership raised its quarterly cash distribution for the 19th consecutive time, to 34 cents. At the recent unit price, that works out to a yield of roughly 6.6%, and management has committed to 3% to 5% annual distribution growth.

AI Data Centers Drive New DemandWhile the company does not break out specific figures, some of the additional growth has clearly come from the rise of artificial intelligence and data centers.

Earlier this year, the company began supplying natural gas to the first of three Oracle NYSE: ORCL data centers and signed an agreement to do the same at a large AI hyperscale campus in central Texas. A third agreement, with CloudBurst, was reached in February to supply an AI-focused data center in Texas.

Just as notable, the company said existing customers are coming back to enlarge commitments they already made.

Energy Transfer Stock Forecast Today12-Month Stock Price Forecast:
$24.36
18.56% Upside

Moderate Buy
Based on 17 Analyst Ratings

Current Price$20.55High Forecast$26.00Average Forecast$24.36Low Forecast$22.00Energy Transfer Stock Forecast Details

Analysts See More UpsideAnalysts have been impressed. Among the 17 analysts following the company, Energy Transfer is rated a consensus Moderate Buy.

Fourteen of the analysts have placed a Buy rating on the units, with two of those labeling it a Strong Buy. Three others recommend Hold.

With the units already up roughly 24% year-to-date, the consensus 12-month price target is $24.36, implying healthy upside. The highest price target is $26, while the lowest is $22, representing little disagreement where the units might be headed from their current price of $20.50.

Debt and Spending Add RiskEven with the recent positive news, though, there are risks and shifts that prospective unitholders should know.

The balance sheet shows roughly $68.4 billion of debt as of June 30. That’s manageable, but spending is not slowing. Management has said it expects to keep spending $5 billion or more annually on organic growth projects through 2029.

That’s probably fine as long as American electricity and gas demand keeps climbing, which is likely. Still, if the AI-driven power demand behind some of these new projects arrives more slowly than promised, the debt will still be there.

Investors Face Structural ChangesTwo structural quirks also matter for investors. Energy Transfer is a master limited partnership, so buyers own units rather than shares and receive a Schedule K-1. For some, that can complicate tax filings and might create complications inside retirement accounts.

Separately, the partnership is also moving its primary listing to the Texas Stock Exchange in October, the first major company of its size to leave the New York Stock Exchange for that venue. The potential impact on liquidity and index eligibility is untested.

Growth Depends on the AI BoomEven enticed by a full Buy rating, prospective investors are well-advised to understand what they would be buying.

In essence, investors are helping underwrite a large multiyear construction program, a heavy debt load, and a demand thesis tied to growing electricity demand and artificial intelligence. That is not necessarily a bad bet, as it proved in the second quarter. But it’s also not necessarily predictable.

The anticipated growth in electricity demand, the future of AI data center buildouts, and the company’s position in a competitive field are where Energy Transfer's bets mostly lie. Then again, management did walk away from the Louisiana project and delivered the company where it is today.

Should You Invest $1,000 in Energy Transfer Right Now?Before you consider Energy Transfer, you'll want to hear this.

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Where you park a high-yield dividend stock can quietly cost you thousands in taxes every single year, and REITs and MLPs carry the steepest penalty of all for investors sitting in the wrong account.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

At the 24% federal bracket, a $50,000 stream of ordinary dividend income hands roughly $12,000 to the IRS every year the position sits in a taxable brokerage account. Inside a Roth IRA, that same distribution stream is not taxed at all, and qualified withdrawals in retirement are not taxed either. The gap between those two outcomes, compounded across a retirement horizon, is the Roth dividend advantage.

Two pay ordinary-income distributions taxed hardest in taxable accounts. Three pay qualified dividends taxed at long-term capital gains rates. All five have live payment records with no recent cuts.

Tax Delta on a $500,000 Position The core math is simple. Investment multiplied by yield equals gross income. Gross income multiplied by the applicable tax rate equals the annual tax cost outside a Roth. A $500,000 position in a stock yielding 8% generates $40,000 in annual income. At the 24% bracket, that position in a taxable account produces $30,400 after tax. Inside a Roth, it produces the full $40,000. The Roth advantage is $9,600 per year, every year, and the reinvested delta compounds tax-free for the life of the account.

For the 2026 tax year the IRS confirmed the 24% bracket applies to single-filer taxable income above $105,700 ($211,400 for married couples filing jointly), with the 32% bracket starting at $201,775 ($403,550 for married couples filing jointly) and the top 37% bracket at $640,600 ($768,700 for married couples filing jointly). Roth annual contribution limits and income eligibility thresholds apply. Check the current IRS figures before contributing.

Ordinary-Dividend Names That Belong in a Roth First Realty Income (NYSE:O | O Price Prediction) yields 5.66% with an annualized forward dividend of $3.258 paid monthly. The latest declared amount stepped up to $0.2715, continuing a long incremental raise pattern. As a REIT, its distributions are taxed as ordinary income in a taxable account, making O the highest-priority Roth candidate on this list.

Energy Transfer LP (NYSE:ET) yields 6.37%, with a latest quarterly distribution of $0.34 and a $1.36 annualized forward amount. MLP distributions carry K-1 complications and can generate Unrelated Business Taxable Income inside an IRA if UBTI exceeds $1,000 in a year, a wrinkle worth confirming with a tax professional. The ordinary-income portion of the distribution still benefits from Roth shielding.

Qualified-Dividend Names With Smaller but Real Roth Benefit Altria Group (NYSE:MO) yields 6.05% after the latest raise to $1.11 per share quarterly. Altria paid $7.0 billion in dividends in full year 2025 and guided 2026 adjusted EPS to $5.56 to $5.72. Qualified dividend treatment means the taxable-account bite is smaller than for O or ET, but at a high single-stock yield the Roth still permanently removes the drag.

Philip Morris International (NYSE:PM) yields 3.07% at a $5.88 annualized forward dividend, following the raise to $1.47 quarterly. Management guided 2026 adjusted EPS to $8.26 to $8.41. Lower headline yield, higher dividend growth. Roth placement shields the compounding stream from future rate changes.

Southern Company (NYSE:SO) yields 3.46% at a $3.04 annualized forward dividend. The regulated utility raised the quarterly to $0.76 and posted Q2 2026 adjusted EPS of $1.13, beating the $1.00 consensus. Lowest yield on the list and lowest tax priority, but a qualified-dividend payer worth Roth space if higher-yielding ordinary payers are already sheltered.

Bracket Multiplier Ordinary-dividend income from O and ET is taxed at 22%, 24%, 32%, or 37% depending on marginal bracket. Qualified dividends from MO, PM, and SO face 0%, 15%, or 20% long-term capital gains rates. A 37% bracket holder loses meaningfully more of every REIT and MLP distribution dollar than a 22% bracket holder. The Roth wipes both to zero.

The Permanent Cost of Wrong Placement The Roth advantage is the annual tax delta, reinvested at the same yield, tax-free, every year the account remains open. On ordinary-income names, giving up ordinary tax on a 5%-to-7% dividend stream for two or three decades is a permanent, quantifiable haircut on retirement income.

What to Do Next If you hold any REIT or MLP in a taxable account, calculate your annual tax cost at your marginal bracket before your next filing. Run the Roth conversion math on the specific ordinary-dividend names first. O and ET produce the largest per-dollar Roth benefit on this list. If a phased Roth conversion is on the table, sequence the highest-yielding ordinary-dividend positions ahead of qualified-dividend payers like MO, PM, and SO. Contact [email protected] for any questions or corrections.

Energy Transfer (ET +0.64%) and The Williams Companies (WMB +1.10%) are two of the largest midstream companies in the United States. Energy Transfer operates more than 140,000 miles of pipeline in 44 states, while Williams owns over 32,000 miles of pipeline in 24 states. Both companies are well-insulated from volatile commodity prices because they merely charge upstream and downstream companies "tolls" to use their infrastructure.

According to the International Energy Agency (IEA), natural gas accounts for more than 40% of the grid electricity consumed by U.S. data centers. Since Energy Transfer and Williams transport massive amounts of natural gas through their pipelines, they're both benefiting from the rapid growth of the power-hungry cloud infrastructure and AI markets. However, one of these companies clearly has more exposure to the AI power build-out than the other.

Image source: Getty Images.

The key differences between Energy Transfer and Williams Energy Transfer transports crude oil, natural gas, natural gas liquids (NGL), and other refined products through its pipelines. It also helps companies export liquefied natural gas (LNG) overseas through its marine export terminals.

Energy Transfer's pipelines transport roughly 30% of the natural gas produced in the United States. However, it only generates about 40% of its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from its natural gas assets.

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Williams owns Transco, the largest natural gas pipeline system in the U.S., which connects the Gulf Coast to the Atlantic Seaboard and Northeast markets. It transports about a third of all natural gas produced in the U.S., and it generates all of its adjusted EBITDA from those operations. That makes it much more of a "pure play" on the AI market -- which requires massive amounts of natural gas -- than Energy Transfer's more diversified business.

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Why is Williams the better AI infrastructure play? Energy Transfer and Williams will both benefit from the soaring demand for natural gas from hyperscalers, but Williams should reap the bigger benefits. Meanwhile, Energy Transfer is more exposed to the crude oil market -- which has less direct exposure to the AI market. Energy Transfer is also a master limited partnership (MLP), which requires additional tax paperwork each year, whereas Williams is more conveniently structured as a C corporation.

That's why Williams trades at 14 times this year's adjusted EBITDA, while Energy Transfer looks much cheaper at 7 times this year's adjusted EBITDA. Energy Transfer's forward yield of 6.5% is much higher than Williams' 2.9% yield, but it could deliver lower long-term returns.