PSXP - Is Energy Transfer's 18%-Yielding Dividend in Trouble Now that Dakota Access Must Shut Down?
Pipeline giant Energy Transfer (NYSE: ET) got another dose of bad news this week. A U.S. district court judge ordered the company to temporarily shut down and drain its Dakota Access Pipeline (DAPL) by August 5th, pending the outcome of an environmental review. The news sent shares of Energy Transfer and the pipeline's other investors into a tailspin.
The news was a big blow for the company, one of several it has encountered this year. These issues have pushed the MLP's unit price down roughly 50%, driving its dividend yield to its current level above 18%. A payout that high is usually a warning sign that a cut is right around the corner. The probability of that outcome has certainly increased following the shutdown of DAPL.
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