Is It Too Late to Buy Energy Transfer After a 25% Rally? History Has a Clear Answer.
Energy Transfer stock is hot, but history indicates that's not a reason to avoid it.
The energy stock Energy Transfer LP (ET) has experienced a 25% year-to-date rally, making it an attractive high-dividend pipeline stock for many retail investors. With a dividend yield of 6.7%, ET is a tempting option for those seeking equity income. However, some investors may be concerned about whether it's too late to invest in ET given its impressive run this year.
While it's impossible to predict the future performance of any stock, ET's history during previous post-rally periods may provide some insight. Stocks don't move in a straight line and often take breaks after extended rallies, which has been the case with ET this year. Despite consecutive months of pullbacks, ET has continued to climb higher.
Currently, ET is trading 7.8% below its 52-week high, which is not considered a correction or the onset of a bear market. In fact, a decline of this magnitude is typically considered normal during a strongly trending stock. Over the past five years, ET has surged 185.1%, outperforming its peer index and providing a high dividend yield that tops the 10-year Treasury yield.
With a track record of strong performance and relatively modest dips after rallies, Energy Transfer appears to be a solid investment option for long-term investors looking for income.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.