Should You Buy Energy Transfer Stock While It's Below $20?

Energy Transfer (NYSE: ET) is 1 of the largest owners of vigor infrastructure successful North America. The fees it charges customers for moving lipid and earthy state astir the satellite are a reliable backstop for the maestro constricted partnership's lofty 7.5% yield. Still, the biggest occupation that much blimpish income investors whitethorn person with Energy Transfer is trust. Here's what you request to know.

Energy Transfer is simply a spot much analyzable than different pipeline-focused MLPs. It not lone operates its ain postulation of midstream assets, but it besides manages 2 different publically traded MLPs, Sunoco LP (NYSE: SUN) and USA Compression Partners (NYSE: USAC). It earns fees for doing that, but immoderate mightiness presumption that work arsenic a imaginable distraction since the fees lone relationship for astir 15% of adjusted net earlier interest, taxes, depreciation, and amortization (EBITDA).

Through the archetypal 9 months of 2025, Energy Transfer's distributable currency travel covered the organisation by a precise comfy 1.8 times. The MLP's leverage, portion higher than immoderate of its peers, isn't worrying, with a fiscal debt-to-EBITDA ratio of astir 4.2.

Looking ahead, Energy Transfer has $5.5 cardinal worthy of superior concern projects connected the books for 2026 alone. Management believes that it volition enactment organisation maturation of 3% to 5% during the year. That scope is the semipermanent target, arsenic Energy Transfer looks to go a much reliable income investment. There are precise bully reasons wherefore you mightiness privation to bargain Energy Transfer portion it is trading beneath $20 a unit.

The aboriginal isn't the large occupation erstwhile it comes to investing successful Energy Transfer; it's the past. More blimpish dividend investors person to travel to presumption with events that occurred during the past 2 worldly vigor manufacture downturns.

In 2020, erstwhile the planetary absorption to the coronavirus pandemic pushed U.S. lipid prices beneath zero, Energy Transfer chopped its organisation successful half. The extremity of deleveraging was noble, but if you had bought the MLP hoping for a reliable income stream, you would person been sorely disappointed. The organisation is increasing again, and supra wherever it was anterior to the cut, but a glass-half-empty presumption of this determination mightiness support you connected the sidelines.