Energy Transfer LP
🇺🇸 ET · NYSE/NASDAQ · US29273V1008
Energy
USD 18.86 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
14.1
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 18.86 ÷ 1.34 = 14.1
TTM period through: 2025-12-31
Forward P/E (estimated): 12.4
Based on analyst estimates
Reference: Provider P/E (Trailing): 15.6
Yield (Fwd)
7.05%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 7.02%
Net Debt/EBITDA (TTM)
4.7x
Latest quarter: 20.1x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 20.1x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
99.0%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 96.4%
Cash Flow Payout (TTM): 46.6%
FCF Coverage (TTM): 0.81x
ROE
11.9%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
8.8x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Energy Transfer is a high-quality midstream powerhouse offering an attractive 7.02% yield backed by massive fee-based operating cash flows and an irreplaceable pipeline network. Trading at $18.86 vs our fair value estimate of $36.14-$54.21, this represents a massive upside to fair value, making it worth considering for new positions. The historical distribution cuts were prudent strategic resets, and the current valuation offers an exceptional entry point for dividend investors seeking income while awaiting price appreciation.
Sector Context
Energy Transfer is a master limited partnership (MLP) operating one of the largest midstream energy portfolios in North America, transporting natural gas, crude oil, and NGLs through an extensive pipeline network. In the midstream sector, companies generate stable, fee-based revenues that act like toll roads, making them highly suitable for dividend strategies, though heavy capital expenditures and depreciation often distort standard GAAP P/E and payout ratios, making P/FFO and Cash Flow Payout the most accurate metrics.
Temporary Opportunity Identified
The market continues to apply a discount based on historical 2020-2021 distribution cuts and broad energy sector cyclicality, overlooking the company's successful transition to a self-funded model and highly predictable fee-based cash flows.
📊 Strategy Analysis
- • Trading at $18.86, substantially below the fair value (P/FFO) range of $36.14-$54.21, with an exceptionally low P/FFO of 6.26x highlighting deep undervaluation for infrastructure assets.
- • The 7.02% yield is highly secure with a cash flow payout ratio of just 46.56%, demonstrating that massive operating cash flows ($1.89B) easily cover distributions despite GAAP metrics being distorted by high depreciation.
- • Irreplaceable pipeline network creates a wide economic moat with utility-like, fee-based revenues that are largely insulated from direct commodity price fluctuations.
- • Historical distribution reductions in 2020-2021 were prudent strategic resets to self-fund growth and reduce reliance on debt markets, positioning the company much stronger today.
⚠ What to Watch
- • Net Debt/EBITDA of 4.71x is elevated and exceeds our conservative 4x threshold, though this leverage profile is typical for asset-heavy midstream operations.
- • Reported Free Cash Flow is technically negative (-$225M) due to massive ongoing capital expenditures for infrastructure expansion.
- • Long-term structural energy transition risks could eventually impact the terminal value of fossil fuel infrastructure, even as natural gas serves as a crucial transition fuel.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-18
Disclaimer: This information is for educational purposes only. Not financial advice.