Energy Transfer's Diversified Assets and Attractive Valuation Support Growing Dividend

Energy Transfer is a large integrated midstream company with a diversified, fee-based business model that makes its cash flows stable. This supports its 8% dividend yield.

The company has an extensive network of assets that allows it to capture pricing arbitrage opportunities in transporting and storing hydrocarbons. This further stabilizes cash flows.

Energy Transfer plans to invest $2B-$3B per year in organic growth projects. This will help drive distribution growth over time.

The stock trades at one of the lowest valuations in its peer group, presenting potential upside if the valuation gap closes.

After cutting its distribution in 2020, Energy Transfer has restored it to previous levels while improving its balance sheet. This helps support future distribution growth.