Energy Transfer (ET): A Rare 7%+ Dividend Stock Trading Below $20

Energy Transfer LP (NYSE:ET) is included among the 13 Best Dividend Stocks to Buy Under $20.

Energy Transfer (ET): A Rare 7%+ Dividend Stock Trading Below $20

An aerial view of an oil rig at sunrise, emphasizing the power of the natural gas transportation industry.

After becoming financially stretched during its previous expansion phase, Energy Transfer LP (NYSE:ET) took steps in recent years to strengthen its balance sheet. In 2020, the company reduced its distribution to lower its debt levels and has since focused on repaying debt and funding most of its growth using free cash flow.

Approximately 90% of Energy Transfer LP (NYSE:ET)’s EBITDA comes from fee-based services, shielding it from fluctuations in commodity prices. A significant portion of its contracts are structured as take-or-pay agreements, ensuring customers make payments regardless of actual usage. This model generates reliable, recurring cash flow, which helps sustain both its distribution and future growth initiatives.

In the most recent quarter, Energy Transfer LP (NYSE:ET) reported distributable cash flow of $2.1 billion. The company offers a quarterly dividend of $0.3275 per share and has a dividend yield of 7.50%, as of July 21. It is among the best dividend stocks under $20.

While we acknowledge the potential of ET to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ET and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 13 Best Industrial Dividend Stocks to Buy Right Now and 10 Best Passive Income Stocks to Buy Now.

Disclosure: None.