ENB:CC - Energy Transfer: Why There Is Still A Decent Upside

2024-04-14 07:27:06 ET

Summary

• Since I published my bull thesis on Energy Transfer early this year, the stock has delivered ~ 14% in total returns.
• This might raise the question of decreased attractiveness and at least partially exhausted upside.
• Looking at the underlying fundamentals, there is a strong evidence that ET has still the necessary characteristics to deliver juicy returns going forward.
• Also, a P/E of 10x coupled with sector-level tailwinds support this.
• In this article, I elaborate on the key items of Q4 2023 results and other recent ET related dynamics, providing a justified basis on my bullish stance on ET stock.

Early this year I wrote an article about Energy Transfer ( ET ) providing several arguments why, in my view, the then-current dividend yield of 9.1% was fully backed by robust fundamentals and in general why the probability of experiencing a similar event as in 2020, when ET cut the dividend, is extremely unlikely. So, the combination of a very enticing dividend and improving cash generation warranted a buy from me....

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