2024-08-30 05:36:00 ET
Energy Transfer (NYSE: ET) is one of the largest, most diversified providers of energy midstream services in the country . Those assets generate lots of steady cash flow, about half of which the master limited partnership (MLP) distributes to investors . With its yield of over 8%, it's a popular income investment.
Investors who like that income stream should check out fellow MLP Delek Logistics Partners (NYSE: DKL) . The smaller midstream services provider currently yields around 11%. While it has a higher risk profile, it has done a terrific job increasing its monster distribution over the years.
Energy Transfer generates about $8.5 billion of distributable cash flow per year. The MLP distributes about $4.5 billion of that cash to investors each year . It retains the rest to fund expansion projects, enhance its financial flexibility, and opportunistically repurchase its common units. The midstream giant has a strong investment-grade balance sheet, backed by a leverage ratio trending toward the lower end of its 4.0 to 4.5 target range.
