Energy Transfer is an attractive, big-distribution midstream energy company, and the price is significantly too low (in our view) because it has been incorrectly lumped in with other energy stocks whose near and intermediate term prices are more dependent on energy prices (ET has stable long-term contracts based on volume, not energy prices). Further, the recent volatility has created an attractive high-income-generating opportunity in the options market. This write-up shares the specific details on this attractive income-generating trade.
Some investors view Energy Transfer, LP (ET) as a stable, cash flow generator. But are is it? And are the fundamentals actually improving? If you don’t know, it’s a Master Limited Partnership (MLP) that operates energy oriented transportation, storage and midstream assets in major production basins in the United States. This article provides a background on the company, analyses its cash flow generation, balance sheet, dividend potential and finally concludes with our opinion on whether investors should take advantage of the company’s high dividend yield.
Energy Transfer (ET) offers a big 8.7% yield, and it trades at a very attractive EV-to-EBITDA relative to peers. However, if you’re going to invest, you may want to consider the big risks ET is currently facing (i.e. the price is low and the yield is high for a reason). This article provides an overview of Energy Transfer, reviews the big risks the organization faces, and concludes with our views on whether Energy Transfer is worth considering as an investment.