Insider buying at Energy Transfer has recently intensified, indicating strong confidence in the company’s future prospects. Kelcy Warren, the co-founder and Executive Chairman, made headlines by acquiring an additional 3 million units of the midstream powerhouse, while co-CEO Thomas Long added about 20,000 units to his position. As it stands, Warren holds nearly 301.5 million units—about 8.8% of all outstanding units—solidifying his status as the largest unitholder in this master limited partnership (MLP). This notable high level of insider ownership, exceeding 10% among major pipeline companies, can create a significant alignment between management interests and those of shareholders.
Such strategic purchases typically suggest that insiders are optimistic about the company’s trajectory. And why wouldn’t they be? Energy Transfer has seen an impressive acceleration in growth, bolstered by successful organic expansion initiatives, favorable market conditions, and lucrative acquisitions. In fact, during the second quarter, the company recorded multiple operational volume milestones, contributing to a robust 32% increase in distributable cash flow.
Adding to this momentum, Energy Transfer recently finalized the acquisition of WTG Midstream for nearly $3.1 billion. This strategic move is projected to enhance the company’s distributable cash flow by $0.07 per unit by 2027, supporting its ongoing distribution growth of approximately 3% to 5% each year—or around $0.01 per unit.
Investors are particularly attracted to Energy Transfer because it offers a cash distribution yield of nearly 8%, significantly outpacing the S&P 500’s average yield of less than 1.5%. This appealing income stream makes the MLP an enticing option for those comfortable navigating the complexities of Schedule K-1 tax forms typically issued by such entities.
The compelling combination of a strong income proposition and prospects for growth paints a bright picture for Energy Transfer, making it an investment worth considering. While the Motley Fool Stock Advisor has outlined ten standout stocks that might offer even more remarkable returns in the long run, the current dynamics surrounding Energy Transfer suggest that it remains a formidable contender in the market.
With insiders signaling their confidence through these substantial purchases, Energy Transfer emerges as a noteworthy opportunity for investors seeking to diversify their portfolios. Whether you are already a shareholder or contemplating a new investment, now might be the perfect time to explore the potential that Energy Transfer has to offer.
For those keen on future growth stories, staying updated on critical industry developments and dynamic market trends is essential to making informed investment decisions. As always, performing due diligence and consulting with a financial advisor can guide you in navigating the ever-evolving landscape of stock investments.