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.

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 as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.