Want $1,000 a Year in Passive Income from Energy Transfer LP (ET) Stock? Here's How Many Shares You'd Need.
Key Points
Energy Transfer specializes in the transportation and storage of natural gas, crude oil, and natural gas liquids (NGLs).
It's a major supplier of energy for data centers, too.
- 10 stocks we like better than Energy Transfer ›
We all want extra income, right? That can be especially true in retirement, but even working folks can put extra income to good use. A fine stock to consider for passive income is Energy Transfer (NYSE: ET), which was sports a hefty dividend yield of 6.2%.
If you're seeking $1,000 in annual income, how many shares of Energy Transfer would you need? Well, the current annual dividend for the stock is $1.36. So divide $1,000 by that and you'll arrive at 735. That's the number of shares you'll need for $1,000 in annual passive income from this stock.
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With a share price of $21.52 at this writing, those 735 shares would cost you $15,817, or just about $16,000. This demonstrates the power of generous dividend yields. If you could devote $160,000 from your portfolio to Energy Transfer, you could be collecting more than $10,000 per year from it in passive dividend income.
If your portfolio's total value is, say, $200,000, you should not devote $160,000 of it to one stock. And if you're devoting $16,000 of your portfolio, again, make sure you don't have too many eggs in one basket. The Motley Fool's investing philosophy suggests buying into around 50 or more companies and aiming to hang on to your shares for at least five years.
Should you invest in Energy Transfer?
It's definitely an intriguing proposition. As my colleague Matt DiLallo notes, "Energy Transfer is finding an attractive market in providing natural gas to AI data centers." That's certainly a promising direction. Critics note that it tends to grow through acquisitions, which carries the risk of overpaying. It's also vital to understand that Energy Transfer is a master limited partnership, not common stock, so there's a little more paperwork to handle come tax time.
Give it a closer look if you're in the market for passive income.
Should you buy stock in Energy Transfer right now?
Before you buy stock in Energy Transfer, consider this:
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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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