Energy Transfer Just Raised Its Dividend for the 19th Straight Quarter. Time to Buy the 6.8% Yield?

1 month ago 8

Matt DiLallo, The Motley Fool

Wed, July 29, 2026 astatine 6:35 AM CDT 4 min read

Energy Transfer (NYSE: ET) has go a precise reliable income concern implicit the past fewer years. The maestro constricted concern (MLP), which sends a Schedule K-1 Federal taxation signifier each year, conscionable notched its 19th consecutive quarterly dividend increase. That wage bump pushes its existent output up to 6.8%.

Here's a look astatine whether now's the clip to bargain the high-yielding MLP for income.

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Built backmost amended

Energy Transfer precocious declared its latest currency distribution. The MLP is raising its quarterly outgo to $0.34 per portion ($1.36 annualized), a much than 3% summation compared to the year-ago period. It volition wage this organisation connected Aug. 19 to unitholders of grounds arsenic of the adjacent of concern connected Aug. 7.

That's the 19th quarterly summation successful a row. The pipeline institution began raising its organisation successful precocious 2021, pursuing a 50% chopped successful aboriginal 2020 to clasp further currency and fortify its fiscal position. That strategy has worked to perfection arsenic Energy Transfer is present successful the champion fiscal signifier successful its history. That has allowed it to steadily rebuild its distribution, which is present good supra the anterior highest of $1.22 per unit.

Plenty of substance to proceed increasing

Energy Transfer presently plans to turn its organisation by 3% to 5% per year. That's a precise achievable level for the MLP. It presently generates important excess escaped currency aft paying distributions ($2.7 cardinal successful distributable currency travel successful the archetypal quarter, compared to little than $1.2 cardinal successful full distributions paid). That's enabling it to clasp important excess escaped currency travel to money its maturation superior program.

The MLP presently expects to put betwixt $5.5 cardinal and $5.9 cardinal into maturation superior projects this year. That's portion of a multi-year, multi-billion-dollar enlargement backlog, with projects expected to participate commercialized work done 2030, including $9.5 cardinal of large state pipeline projects. It besides has galore smaller-scale state pipeline projects underway, arsenic good arsenic crude lipid and earthy state liquids (NGL) projects. Meanwhile, it has respective further projects nether improvement to enactment increasing state powerfulness demand, NGL exports, and U.S. lipid production. These projects should thrust meaningful net and currency travel maturation arsenic they participate commercialized service. The MLP presently expects to turn its adjusted net earlier interest, taxes, depreciation, and amortization (EBITDA) by 15% astatine the midpoint of its guidance scope this year. This maturation should enactment its organisation maturation plan.

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