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Energy Transfer (ET) Raises Quarterly Distribution Rate by 0.8%
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Energy Transfer (ET - Free Report) announced that its board of directors has approved a 0.8% increase in its quarterly cash distribution rate. The new distribution rate will be 31.5 cents per unit compared with the previous quarter’s 31.25 cents, payable on Feb 20, 2024, to unitholders of record as of Feb 7, 2024.
This increase resulted in an annualized distribution of $1.26 per unit compared with the previous level of $1.25.
Can Energy Transfer Sustain Distribution Hikes?
Energy Transfer owns and operates a diversified portfolio of energy assets in the United States. The firm benefits from its portfolio of assets with geographic diversity. Its multiple segments generate high-quality and balanced earnings. The partnership's Lake Charles LNG Terminal provides it with a strong foothold in the global LNG business and further boosts its performance.
The majority of the firm’s segment margins are fee-based and, therefore, have limited commodity price sensitivity. In November 2023, Energy Transfer completed its previously announced merger with Crestwood Equity Partners LP.
As a result of the acquisition, the firm now owns and operates more than 125,000 miles of pipelines and related assets in all the major U.S. producing regions, further enhancing its leadership position in the midstream sector. The transaction is immediately accretive to distributable cash flow per unit for Energy Transfer, and adds significant cash flows from firm and long-term contracts.
Energy Transfer has the potential to expand and improve even more, which suggests that management will have sufficient funds to continue with its unitholder-friendly activities in the future.
Oil & Gas Companies Paying Dividends
The oil and gas midstream companies generally earn a steady income through long-term transportation and storage contracts with customers. The stability of performance allows these companies to share profits with shareholders.
In the past few months, some other oil and gas companies like ONEOK, Inc. (OKE - Free Report) , Cheniere Energy, Inc. (LNG - Free Report) and Delek Logistics Partners, LP (DKL - Free Report) have also raised their quarterly dividend and distribution rates by 3.7%, 10% and 1%, respectively.
The Zacks Consensus Estimate for ONEOK’s 2024 earnings is pegged at $4.85 per share, implying a year-over-year decrease of 11.9%. OKE’s current dividend yield is 5.42%.
The Zacks Consensus Estimate for Cheniere Energy’s 2024 earnings is pegged at $10.04 per share, implying a year-over-year decrease of 74.7%. LNG’s current dividend yield is 1.04%.
The Zacks Consensus Estimate for Delek Logistics Partners’ 2024 earnings is pegged at $3.64 per unit, implying a year-over-year increase of 12.4%. The firm reported an earnings surprise of 2.6% in the last quarter.
Price Performance
In the past three months, Energy Transfer’s units have risen 10% compared with the industry’s growth of 6.7%.
Image: Bigstock
Energy Transfer (ET) Raises Quarterly Distribution Rate by 0.8%
Energy Transfer (ET - Free Report) announced that its board of directors has approved a 0.8% increase in its quarterly cash distribution rate. The new distribution rate will be 31.5 cents per unit compared with the previous quarter’s 31.25 cents, payable on Feb 20, 2024, to unitholders of record as of Feb 7, 2024.
This increase resulted in an annualized distribution of $1.26 per unit compared with the previous level of $1.25.
Can Energy Transfer Sustain Distribution Hikes?
Energy Transfer owns and operates a diversified portfolio of energy assets in the United States. The firm benefits from its portfolio of assets with geographic diversity. Its multiple segments generate high-quality and balanced earnings. The partnership's Lake Charles LNG Terminal provides it with a strong foothold in the global LNG business and further boosts its performance.
The majority of the firm’s segment margins are fee-based and, therefore, have limited commodity price sensitivity. In November 2023, Energy Transfer completed its previously announced merger with Crestwood Equity Partners LP.
As a result of the acquisition, the firm now owns and operates more than 125,000 miles of pipelines and related assets in all the major U.S. producing regions, further enhancing its leadership position in the midstream sector. The transaction is immediately accretive to distributable cash flow per unit for Energy Transfer, and adds significant cash flows from firm and long-term contracts.
Energy Transfer has the potential to expand and improve even more, which suggests that management will have sufficient funds to continue with its unitholder-friendly activities in the future.
Oil & Gas Companies Paying Dividends
The oil and gas midstream companies generally earn a steady income through long-term transportation and storage contracts with customers. The stability of performance allows these companies to share profits with shareholders.
In the past few months, some other oil and gas companies like ONEOK, Inc. (OKE - Free Report) , Cheniere Energy, Inc. (LNG - Free Report) and Delek Logistics Partners, LP (DKL - Free Report) have also raised their quarterly dividend and distribution rates by 3.7%, 10% and 1%, respectively.
The Zacks Consensus Estimate for ONEOK’s 2024 earnings is pegged at $4.85 per share, implying a year-over-year decrease of 11.9%. OKE’s current dividend yield is 5.42%.
The Zacks Consensus Estimate for Cheniere Energy’s 2024 earnings is pegged at $10.04 per share, implying a year-over-year decrease of 74.7%. LNG’s current dividend yield is 1.04%.
The Zacks Consensus Estimate for Delek Logistics Partners’ 2024 earnings is pegged at $3.64 per unit, implying a year-over-year increase of 12.4%. The firm reported an earnings surprise of 2.6% in the last quarter.
Price Performance
In the past three months, Energy Transfer’s units have risen 10% compared with the industry’s growth of 6.7%.
Image Source: Zacks Investment Research
Zacks Rank
Energy Transfer currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.