Home Stock Energy Transfer Stock: Top Dividend Play
imageStock Markets35 minutes ago (Sep 29, 2021 07:00PM ET)

(C) Reuters. Energy Transfer Stock: Top Dividend Play

Energy Transfer (NYSE:ET) provides energy-related services.

The company’s main focus is natural gas; it sells natural gas, and operates significant pipelines. I’m bullish on the stock. (See ET stock charts on TipRanks)

Q2 Results, Valuation

Energy transfer reported its Q2 results in August. The company posted revenues of $15.1 billion (a 105.7% year-over-year increase) and EBITDA of $2.62 billion, an improvement on the $2.44 billion a year ago.

Energy Transfer’s forward P/E ratio (4.8) is trading 52.3% below its five-year average, and 58.16% below its sector average. If you couple this with its forward PEG ratio of 1, it’s safe to say that the stock has plenty of ground to make up.

Furthermore, if you value the stock according to an asset-based valuation, you’ll find that its fair value is $14.65.

The stock has a forward dividend yield of 6.3%. Energy Transfer’s dividend payout ratio is 86.8% lower than its five-year average, and it’s able to cover its dividends by 3.2 times.

These numbers looked at in isolation would suggest that shareholder compensation in the form of further dividend increases, and/or aggressive share buybacks, are a possibility.

Supply Chain Concerns

Surging commodity prices have generated temporary slack for energy producers/suppliers.

Energy Transfer has a strong foothold in the Permian basin. Many analysts believe that operations in the Permian will be fully recovered by 2022, which could bolster output volume, and increase supply contract demand.

Wall Street’s Take

UBS (UBS) recently added Energy Transfer to its list of 20 top dividend stocks due to its income prospects, but also its ability to perform well in a high-yield environment as a value stock.

UBS isn’t the only Wall Street bank upbeat on Energy Transfer stock. The median price target by Wall Street Analysts is $14, and there have been six Buy ratings assigned in the past three months.

Final Thoughts

Energy Transfer is a great stock whether you’re in search of a capital gains play, or a dividend-paying investment.

Disclosure: At the time of publication, Steve Gray Booyens had a long position in ET.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Energy Transfer Stock: Top Dividend Play

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Energy Transfer Stock: Top Dividend Play



Latest News