Bullish on Energy Transfer Partners LP? You'll Love These Stocks

Investors have good reason to be bullish on Energy Transfer Partners (NYSE: ETP) since several catalysts could send this beaten-down master limited partnership soaring. That said, there are just as many reasons why investors should be cautious, including the massive cost of the incentive distribution rights (IDRs) owed to its parent company, Energy Transfer Equity (NYSE: ETE), and its weak balance sheet, which could continue to weigh on units. That's why those who are bullish on Energy Transfer Partners should take a closer look at Summit Midstream Partners (NYSE: SMLP) and Plains All American Pipeline Partners (NYSE: PAA). Investors will likely love what they see since both offer similar potential but with less risk.

One of the draws of Energy Transfer Partners is its eye-popping 11.8% yield. The company can currently cover its payout, but that's because it's getting some support from Energy Transfer Equity, which agreed to waive a portion of the costly IDRs it's owed for the next few years. As a result, this payout isn't as safe as it seems since Energy Transfer wouldn't have fully covered it last quarter without that support. That's why yield lovers should take a closer look at Summit Midstream Partners and its equally attractive 10.8% yield.

Image source: Getty Images.

Source: Fool.com