Energy Transfer Continues to Steadily Put More Cash into Its Investors' Pockets

Energy Transfer (NYSE: ET) is giving its investors another raise. The master limited partnership (MLP) is increasing its quarterly cash distribution to $0.325 per unit, or $1.30 annualized. That's up from last quarter's level of $0.3225 per unit, or $1.29 annualized, and 3.2% higher than the year-ago payment. This latest increase pushes its yield above 6.3%, which is several times higher than the S&P 500's 1.2% dividend yield. The midstream giant's high-yielding payout should continue to head higher in the future. That makes it a great income stock for those comfortable with investing in an MLP that sends its investors a Schedule K-1 Federal Tax Form each year.Energy Transfer can easily afford its distribution. The MLP produces about $8.5 billion of distributable cash flow each year. Its cash flow is very stable, with 90% of its earnings coming from predictable fee-based sources. The current cash flow level easily covers its distribution outlay, which is around $4.5 billion. This payout level allows it to retain about $4 billion each year to invest in growth projects, totaling $2.5 billion to $3.5 billion per year, and for discretionary opportunities such as debt repayment, acquisitions, and unit repurchases. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool