Best dividend played by TipRanks

© Reuters. Energy transfer actions: Better dividend

Energy transfer (NYSE 🙂 provides energy related services.

The main objective of the business is; it sells natural gas and operates major pipelines. I am bullish on the stock. (See ET stock charts on TipRanks)

T2 results, evaluation

Energy Transfer released its second quarter results in August. The company posted revenues of $ 15.1 billion (a 105.7% year-over-year increase) and EBITDA of $ 2.62 billion, an improvement from $ 2.44 billion ago a year.

Energy Transfer’s forward P / E ratio (4.8) is trading 52.3% below its five-year average and 58.16% below its sector average. If you pair this with its forward PEG ratio of 1, it’s safe to say the stock has a lot of ground to catch up.

Additionally, if you value the stock on an asset-based valuation, you will find that its fair value is $ 14.65.

The stock has a forward dividend yield of 6.3%. Energy Transfer’s dividend payout ratio is 86.8% lower than its five-year average, and it is able to cover its dividends 3.2 times.

These numbers taken in isolation suggest that shareholder compensation in the form of further dividend increases and / or aggressive share buybacks is a possibility.

Supply chain issues

Soaring commodity prices generated a temporary slack for energy producers / suppliers.

The transfer of energy is strongly implanted in the Permian basin. Many analysts believe operations in the Permian will be fully restored by 2022, which could increase production volume and increase demand for supply contracts.

The Taking of Wall Street

UBS (UBS) recently added Energy Transfer to its list of the 20 highest dividing stocks due to its income outlook, but also its ability to perform well in a high yielding environment as a value stock.

UBS isn’t the only Wall Street bank to be bullish on Energy Transfer stock. The Wall Street analysts’ median price target is $ 14 and six buy ratings have been given in the past three months.

Final thoughts

Energy Transfer is a great stock whether you are looking for a capital gains game or a dividend paying investment.

Disclosure: At the time of publication, Steve Gray Booyens had a long position in ET.

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