Energy Transfer Stock Analysis | 14% Dividend Yield?
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 Published On Jun 6, 2020

Welcome to Stock Investment Analysis for another in-depth analysis, this time for Energy Transfer stock, ticker ET. My goal for this video is to give a close look at Energy Transfer Partners to help you better determine whether you want to invest in this company with a massive dividend yield. We will discuss the dividend, growth, valuation, debt, potential returns, future directions, and potential risks. My hope is that, not only will this video help you better choose whether to invest in energy transfer, it will help you better understand how to evaluate companies and do your own research. When you hear another YouTuber saying to go buy X stock, I want you to be able to critically consider that stock for yourself and decide if that is an investment for you. Please hit the button, subscribe, and hit the bell so you never miss a video!

First, let’s talk about what energy transfer is. Energy Transfer is the largest energy MLP, or master limited partnership, on the planet. It is primarily a midstream MLP. Now what does all of that mean? A Master limited partnership is simply a company with a particular tax structure in the united states. A REIT or real estate investment trust is another example of a stock with a unique tax structure. A MLP is taxed as a partnership. For the sake of this video, I won’t get into the details of taxation, but simply know there are certain tax advantages the US grants to these companies but they require a different tax form called a K-1 when taxes are done by shareholders. Now, I mentioned they are a “midstream” company. What do I mean by midstream?

There are three categories of energy sector companies. You may have imagined an oil company, for example, discovered oil, drilled for oil, collected it, transported it, refined it, and sold it. In reality, most energy companies only focus on part of this process. Companies that conduct the exploration, discovery, and drilling are called upstream. Examples include Saudi Aramco, ExxonMobil, BP, Royal Dutch Shell, and Chevron. If you own one of these companies, that is their primary focus. Downstream companies refine the oil and create plastics and other products with it which are sold to companies and consumers. Examples of these companies include Marathon Petroleum Corp, Phillips 66, and Valero. So how does the oil or natural gas get from the upstream companies to the downstream? You guessed it, the midstream companies like ET transport them hence the name energy transfer. Midstream companies transport oil by trucks, barges, and pipelines and also provide storage as the oil is ultimately sent to utilities, industry, or residences. For natural gas, they again rely on pipelines and oversee gas processing and something known as fractionation in which gases are further separated.

Using Fast Graphs, Finbox, Finviz, and Fidelity, I analyze Energy Transfer’s Company Characteristics, Historical Growth, Forecasted Growth, Dividends, Returns, Valuation, Margins, and Company Safety. Within those categories, I analyze a large number of variables including: price to earnings ratio, price to sales ratio, price to free cash flow ratio, price to book ratio, dividend, dividend yield, debt to equity ratio, fair value, target price, forward pe, the PEG ratio, EPS, EPS growth, dividend growth, return on assets (ROA), return on equity (ROE), return on investment (ROI), normal PE, forward price to sales, gross margins, operating margins, profit margins, interest coverage, short term debt coverage, debt paydown yield, credit rating, current ratio, quick ratio, free cash flow yield, and beta. I compare Energy Transfer stock to its own history and as well as to the industry. I also analyze Energy Transfer’s business, diversification across clients, risks, and future prospects.

What are your thoughts on Energy Transfer as an investment? Please share your thoughts in the comments below. I am excited to see what you think. Take a moment to subscribe and hit the bell because I am creating new videos for you every week. As always, good luck with your investing.

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Used in this video:
www.fastgraphs.com
www.fidelity.com
www.finviz.com
www.finbox.com

DISCLOSURE: I am long ET.

DISCLAIMER: All information and data on this YouTube Channel is solely for entertainment purposes. The information herein is based solely on my personal opinion and experience. All investments hold inherent risk, and the information provided on this YouTube Channel should not be interpreted as guidance, recommendations, offers, advice, or suggestions. Any ideas and strategies discussed on this channel should not be implemented without first considering your financial and personal circumstances or without consulting a financial professional.

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