If You Like Energy Transfer’s 7.4%-Yielding Payout, You Should Check Out This 9.1%-Yielding Dividend Stock
From Yahoo Finance.: 2025-05-24 09:46:00
Energy Transfer (NYSE: ET) offers a 7.4% yield, steadily increasing each quarter, making it popular among income-seeking investors. Plains All American Pipeline (NASDAQ: PAA) has a higher-yielding payout of 9.1% and owns an extensive pipeline network transporting 8 million barrels of oil and NGLs daily. It aims to grow its payout by $0.15 annually.
Plains All American Pipeline has a 1.7x distribution coverage ratio, lower than Energy Transfer’s 2x, with a 3.3x leverage ratio. It offers two ownership options: a Schedule K-1 through the MLP or shares of Plains GP Holdings that sends a 1099 form. The company targets a 10% annual distribution growth rate.
Plains All American Pipeline plans to invest $300-400 million annually in growth projects and acquisitions. It recently placed the Fort Saskatchewan fractionation debottleneck project into service, enhancing cash flow. The company uses excess free cash flow and balance sheet flexibility for acquisitions, like its purchase of Black Knight Midstream’s Permian Basin business.
Energy Transfer and Plains All American Pipeline offer attractive income streams, with Plains having a faster distribution growth rate. Plains aims to increase its payout by $0.15 annually until reaching a 160% coverage ratio. It provides an option for investors seeking a higher income stream without a Schedule K-1.