Shares of Energy Transfer LP (NYSE:ET) increased by 1.6% on Wednesday following the announcement of a higher quarterly dividend. The stock reached a peak of $18.25 before closing at $18.2450. Approximately 13,425,433 shares changed hands during the trading session, reflecting a 16% decrease from the average daily volume of 15,906,451 shares. The previous closing price was $17.95.
The company will distribute a dividend of $0.335 per share on February 19, 2024, to shareholders of record as of February 6, 2024. This marks an increase from the prior dividend of $0.33, translating to an annualized dividend of $1.34 and a dividend yield of 7.3%. Notably, the company’s dividend payout ratio (DPR) stands at 106.40%.
Analysts’ Perspectives on Energy Transfer
In recent assessments, several research firms have provided insights on Energy Transfer’s stock. Weiss Ratings reiterated a “buy (B-)” rating, reflecting confidence in the company’s prospects. Conversely, Morgan Stanley adjusted their price objective from $21.00 to $19.00 while maintaining an “overweight” rating. Similarly, JPMorgan Chase & Co. lowered their target from $22.00 to $21.00 but also rated the stock as “overweight.”
Jefferies Financial Group assigned a price target of $17.00 with a “hold” rating, while UBS Group reiterated a “buy” rating. Of the twelve analysts covering the stock, twelve assigned a “buy” rating while one issued a “hold,” resulting in an average rating of “Moderate Buy” and a consensus target price of $21.50.
Performance Metrics and Market Sentiment
With a market capitalization of $62.64 billion, Energy Transfer showcases a P/E ratio of 14.60, a PEG ratio of 0.94, and a beta of 0.66. The company’s quick and current ratios stand at 1.14 and 1.41, respectively, indicating a strong liquidity position. The debt-to-equity ratio is 1.50, which is relatively moderate for the industry.
On November 5, 2023, Energy Transfer reported earnings results revealing $0.28 earnings per share (EPS), falling short of analysts’ expectations of $0.34 by $0.06. The company generated revenue of $19.95 billion, below the consensus estimate of $21.84 billion. This represents a decline of 3.9% compared to the same quarter last year.
Market analysts anticipate that Energy Transfer LP will achieve an EPS of $1.46 for the current fiscal year.
Recent reports have highlighted several factors influencing Energy Transfer’s stock performance. The company’s decision to raise its quarterly cash distribution is seen as a catalyst for income-focused investors, offering a year-over-year increase of over 3% and a yield of approximately 7.4%. Analysts from Zacks have recognized the continuous distribution increases and favorable earnings forecasts, framing the stock as an attractive income investment.
Furthermore, the impact of external events, such as Winter Storm Fern, has been noted as a potential demand shock benefiting pipeline operators. Energy Transfer’s extensive footprint and storage capabilities position it to leverage wider hub spreads and enhanced throughput margins.
On the insider front, Kelcy Warren, the company’s Chairman, acquired 1,000,000 shares at an average price of $16.95 per share, totaling $16,950,000. Following this transaction, Warren’s total ownership in the company increased to 104,577,803 shares, valued at approximately $1.77 billion.
Institutional investors have also shown interest in Energy Transfer, with hedge funds increasing their holdings significantly in the second quarter. Notable increases include Chelsea Counsel Co., which raised its stake by 370.3%, and Ariston Services Group, which boosted its holdings by 126.7%. Collectively, institutional investors own 38.22% of the stock.
Energy Transfer operates as a midstream energy company based in Dallas, focusing on the transportation, storage, and processing of hydrocarbons through an integrated network of pipelines and facilities across the United States.
