Energy Transfer LP (NYSE: ET) is an exchange-traded fund that is performing well in a rising energy price environment. The ETF presently pays out a dividend yield of about 7%, but it has the potential to grow dividends to shareholders by another 50%.
The oil and gas business in the United States is a big part of ET stock’s portfolio. These assets, in particular, contribute 35 percent of US oil transportation and 25% of natural gas transportation.
The yearly dividend for Energy Transfer LP (ET) is now $0.8. In January, the corporation hiked its dividend by 15%, followed by another 14.3% rise in April, bringing the yearly payout to 30% higher than in 2021.
Despite outperforming the S&P 500, Energy Transfer LP (ETdividend )’s yield is still below the prior high of $1.22 per year. In the face of COVID-19, Energy Transfer has decided to lower dividend payments in 2020. Perhaps it’s time for dividends to be reinstated at their prior amounts.
Energy Transfer earned $2.1 billion in free cash flow in the first quarter and returned $618 million to shareholders. The remaining funds were utilized to pay off debt and develop the company.
As a result, Energy Transfer LP (ET)’s usage of borrowed cash has already surpassed earlier levels, implying that the corporation might theoretically enhance dividends once more. Nonetheless, even if this does not occur,
Energy Transfer may take advantage of the current favorable energy market condition. Liquefied natural gas (LNG) purchases are expected to rise, and Energy Transfer may expand the capacity of its gas transmission network as a result.
Energy Transfer LP (ET) is, in particular, looking at the possibility of commencing construction on a new petrochemical plant in Panama. In the end, the corporation wants to dramatically improve cash flow, which will allow it to increase payouts even more.