2 Cheap Energy Dividend Stocks With Growing Payouts, Led by Energy Transfer

1 month ago 21

Jeff Siegel, The Motley Fool

Wed, July 29, 2026 astatine 9:20 AM CDT 5 min read

Income investors don't person to take betwixt a precocious dividend output and dividend growth. Because successful the midstream vigor sector, it's imaginable to get both, and often astatine valuations that stay good beneath the broader market.

Two of the champion examples are Energy Transfer (NYSE: ET) and Enterprise Products Partners (NYSE: EPD). Both run monolithic pipeline and vigor infrastructure networks that make mostly fee-based currency flow, making them little babelike connected regular swings successful lipid and earthy state prices than exploration and accumulation companies. Moreover, some proceed to summation their distributions portion trading astatine comparatively inexpensive valuations.

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Energy Transfer

Energy Transfer stands retired arsenic 1 of the cheapest large-cap income stocks successful the vigor sector. The concern presently yields astir 6.7%, much than 6 times the S&P 500's dividend output of astir 1.05%, portion inactive trading astatine a valuation beneath galore of its ample midstream peers.

Energy Transfer owns 1 of the largest vigor infrastructure networks successful North America, with much than 140,000 miles of pipelines transporting earthy gas, crude oil, earthy state liquids, and refined products crossed 44 states. About 90% of the company's expected 2026 adjusted net earlier interest, taxes, depreciation, and amortization (EBITDA) is projected to travel from fee-based earnings, with lone constricted vulnerability to commodity prices and selling spreads.

The institution has present accrued its organisation for 18 consecutive quarters. It besides continues targeting yearly organisation maturation of astir 3% to 5% portion investing heavy successful caller pipeline and export projects tied to increasing earthy state demand, including request from AI-powered information centers.

Enterprise Products Partners

If Energy Transfer offers the higher yield, Enterprise Products Partners offers exceptional consistency. Enterprise has accrued its organisation for 28 consecutive years, 1 of the longest streaks successful the full vigor industry. Its annualized organisation present stands astatine $2.24 per unit, producing a dividend output of astir 6%.

Despite its high-quality plus basal and decades-long grounds of organisation growth, Enterprise continues to commercialized astatine a tenable valuation comparative to galore large-cap infrastructure companies.

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