ET - Energy Transfer Q1: One Of My Favorite High-Yielding Investments (Rating Downgrade)

2024-05-12 07:00:00 ET

Summary

• Energy Transfer is one of the core holdings within my portfolio.
• The MLP's volumes grew in the first quarter, propelling adjusted EBITDA and DCF sharply higher for the period.
• Energy Transfer moderately hiked its adjusted EBITDA guidance, which bodes well for the investment-grade balance sheet.
• My fair value estimate suggests that units could still be priced at a 14% discount.
• Energy Transfer combines a safe and rising 7.8% distribution yield with the potential for moderate growth and valuation upside.

Readers who have followed me from the beginning are probably aware that my investing strategy has shifted in recent years. In the past, I was too oriented toward income investing (for being in my mid-20s, anyway) to the detriment of total returns. Now, I'm striking more of a balance in my investing strategy.

I'm buying great companies with newly initiated dividends and tons of growth potential. Thi nk Alphabet ( GOOGL )....

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