Energy Transfer is strengthening its balance sheet and contract structure, offering a 7% yield with safe distribution. The company benefits from increasing natural gas demand and has improved its financials over the past few years, with strong opportunities for growth. 90% of its EBITDA comes from fee-based services with stable cash flow.

With a forward yield of 7.5% and a coverage ratio of 2.1, Energy Transfer is well-positioned for distribution growth. The company has raised its distribution for 13 consecutive quarters and is targeting annual increases of 3% to 5%. It aims to maintain a strong balance sheet to support future growth projects.

Energy Transfer plans $5 billion in capital expenditures this year, focusing on projects with mid-teens returns tied to real demand. Projects like the Hugh Brinson pipeline and the Lake Charles LNG project show the company’s commitment to growth. It also explores opportunities in AI data centers, providing additional sources of demand.

Despite its strong business fundamentals, Energy Transfer trades at a discounted multiple compared to historical averages and peers. The company’s improved balance sheet, contract structure, and growth plans make it an attractive investment for income-focused investors. With disciplined growth and solid returns, Energy Transfer presents growth potential alongside a compelling yield.

Read more at Yahoo Finance: 5 Reasons to Buy Energy Transfer Stock Like There’s No Tomorrow