Why Energy Transfer (ET) is a Strong Buy for Income Investors in 2025

Energy Transfer LP (NYSE:ET) is included among the Best Strong Buy Dividend Stocks to Invest in Now.

The company’s generous yield rests on a solid and dependable financial base. Around 90% of its yearly earnings come from long-term, fee-based agreements and government-regulated pricing, which ensure consistent cash flow. In addition, it returns only a modest share of its cash flow to shareholders. In the first quarter, the midstream firm reported $2.3 billion in distributable cash flow—more than double the $1.1 billion it paid out.

With this surplus, Energy Transfer LP (NYSE:ET) can continue expanding its operations without compromising its financial strength. Its leverage ratio currently sits at the lower end of its 4.0 to 4.5 target range, marking its strongest financial standing to date.

This robust position also supports ongoing increases to its distribution. Energy Transfer LP (NYSE:ET) is aiming for quarterly raises, with a goal of 3% to 5% annual growth. Over the past year, it has already lifted its payout by more than 3%. On July 24, the company declared a 0.8% hike in its quarterly dividend to $0.33 per share. This marked the company’s 14th consecutive quarter of dividend increases. The stock has a dividend yield of 7.29%, as of July 29.

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.

READ NEXT: 11 Innovative Dividend Stocks to Buy Now and 10 Best and Safe Dividend Stocks to Buy Now

Disclosure: None.