ET - Forget Energy Transfer; Buy This Magnificent High-Yield Stock Instead
2024-05-11 10:38:00 ET
If all you consider is yield, then Energy Transfer (NYSE: ET) and its roughly 8% distribution yield will handily beat out Enterprise Products Partners (NYSE: EPD) and its 7.3% yield. But there's so much more to an investment than just yield, and in this situation, most income investors will probably feel much better owning the lower-yielding option. Here's why.
Energy Transfer and Enterprise Products Partners both play in the midstream segment of the energy sector . That means they own the pipelines, storage, transportation, and processing assets that help to connect the upstream (energy producers) to the downstream (refining and chemicals), effectively helping to move oil and natural gas around the world. The key to the midstream business is that it is largely fee-based, so volatile energy prices are less important than demand for energy. Energy demand tends to remain robust regardless of energy prices.
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Forget Energy Transfer; Buy This Magnificent High-Yield Stock Instead