Energy Transfer: High Yield Isn't the Only Factor to Consider

Tuesday, 9 April 2024, 08:15

Energy Transfer boasts an impressive 8.1% distribution yield, but there are significant risks that make it a questionable investment choice. While the stable midstream business is appealing, the company's history of distribution cuts and management decisions raise red flags for investors. With better options in the midstream sector offering reliable returns, Energy Transfer's high yield alone isn't compelling enough for most conservative income investors.

https://store.livarava.com/79751419-f649-11ee-8980-87cc5c87fb08.jpg — Energy Transfer: High Yield Isn't the Only Factor to Consider

Overview

Energy Transfer has an 8.1% yield that's attractive for income investors, but the distribution cut in 2020 has raised concerns.

The Good Stuff

Energy Transfer's 8.1% yield: Attractive compared to other options in the market.
Midstream business: Operates a large portfolio of energy infrastructure with consistent cash flows.

Risks

Distribution cuts: Energy Transfer cut its distribution in 2020 unlike its peers.
Management decisions: Past questionable decisions regarding acquisitions raise doubts about shareholder interests.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.

Overview

The Good Stuff

Risks

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