Is Energy Transfer Stock a Buy?
Even though the oil and gas sector has been running laps around the broader market in 2022, there are still loads of companies in the space selling for dirt-cheap valuations and sky-high yields. One company that stands out as looking incredibly cheap is Energy Transfer (NYSE: ET). The midstream oil and gas company currently sports a distribution yield of 8.1%.
Is this juicy payout too good to be true? Let's see if Energy Transfer's operations can support this kind of high-yield payout and whether you can trust it enough to be a buy.
If you read through the company's investor presentations, valuation, and current distribution yield, you can see why many people would see the opportunity here. As a midstream operator of pipelines, processing facilities, storage terminals, and a liquefied natural gas (LNG) export terminal in the planning phase, it is in one part of the oil and gas industry where commodity prices don't matter as much. Management estimates that 85% to 90% of its annual revenue comes from fixed-price fee contracts for the use of its assets.
Source Fool.com
