1 Reason Energy Transfer Could Be the Best Dividend Stock of 2026
Key Points
Energy Transfer now pays an annual dividend of $1.34 per share.
The stock has risen more than 16% in 2026.
Energy Transfer anticipates its distribution growth rate to be between 3% and 5% annually.
- 10 stocks we like better than Energy Transfer ›
There aren't many stocks that can boast a 7% dividend yield. Energy Transfer LP (NYSE: ET) is one of them. The midstream company provides steady income to investors, while it's simultaneously strengthening its operations. Energy Transfer could be the best dividend stock of the year.
Energy Transfer currently pays an annual dividend of $1.34 per share. The company's dividend has been modestly but steadily increasing over the past few years. The stock is also up by more than 16% year to date. The appreciation in share price has lowered the dividend yield, but it still hovers around 7%. The company expects its long-term distribution growth rate to increase 3% to 5% annually.
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Analysts are largely aligned in rating Energy Transfer a "buy," and it trades below Wall Street's average target price. The stock's forward P/E ratio is 11.5, and the PEG is well under 1 at 0.64. For investors searching for solid businesses at fair prices, Energy Transfer fits the bill.
Energy Transfer's outlook is also strong. The company expects to invest more than $5 billion in projects to enhance its natural gas network. The expansions, along with long-term commitments, could potentially support returns in the mid-teens, according to the company.
The current geopolitical conditions are also highly favorable for Energy Transfer. The Trump administration recently announced a shift away from wind energy to reallocate funds into natural gas.
For long-term investors seeking high-yield income, Energy Transfer is more than just a compelling case. It could be the best cash-flowing opportunity in 2026.
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Catie Hogan 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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