With a Nearly 7% Yield, Is Energy Transfer Stock a Buy as It Looks to Turbocharge Growth?

Energy Transfer (ET) reported impressive Q3 results, with its adjusted EBITDA increasing by 31% year over year to $5.03 billion. The master limited partnership (MLP) saw strength across its seven operating segments, particularly in its NGL and refined products segment, where adjusted EBITDA rose by 16% to $1.22 billion. Distributable cash flow (DCF) to partners jumped 33% to $2.52 billion, with a distribution payout of $1.18 billion, resulting in a coverage ratio of 2.1x.

The company raised its quarterly distribution by 3% to $0.3425 per unit. Energy Transfer has a robust growth outlook, with plans to boost its growth capital expenditures (capex) and has announced several major projects, including the Hugh Brinson Pipeline and the Desert Southwest pipeline. Despite its strong growth, the stock remains one of the cheapest midstream MLPs, trading at a forward enterprise value-to-EBITDA multiple of 8.2 times, offering significant upside potential.

With a high yield of 6.8% and a growing distribution, Energy Transfer is an attractive buy for investors seeking solid returns.