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Post by Fearchar on May 10, 2023 13:21:15 GMT
Does anybody own or closely follow ET?
I read that Bill Gross has 30% in ET. Seeking Alpha has several positive articles and says Wall Street Analyst are also positive. Quant rating though is not very strong.
I have no position, but am drawn by the fat dividends like a sailor hearing sirens.
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Post by richardsok on May 10, 2023 16:34:08 GMT
Does anybody own or closely follow ET? I read that Bill Gross has 30% in ET. Seeking Alpha has several positive articles and says Wall Street Analyst are also positive. Quant rating though is not very strong. I have no position, but am drawn by the fat dividends like a sailor hearing sirens. Fearless: I have a relatively small position in ET. TipRanks scores it 9/10. Earns well enough to cover dividend. Analysts like it. Thumbs up from Merrill Lynch. Projects healthy earnings growth from 1.34 now to 1.56 next year. Currently priced in the lower parts of its historical range. IMO, a good stock for a retiree to buy some right herefor the dividend and add a GTC buy order, say, around 10.01 or so. Set & forget. I don't have any info about the "quant" numbers you mention. My two bits.
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Post by mnfish on May 10, 2023 16:43:52 GMT
Owned since 2014-15 so you can imagine what my cost basis is. If you can't, it's about $28. But, like the CEF guys say, I don't care. Really, I do but I held it just out of spite I guess. Anyway, Wells likes it so I'm going to keep it. From a recent report- "Investment Thesis - We have an Overweight rating on ET given the partnership's high distribution yield, robust free cash flow growth, and the potential for additional capital return over time as leverage declines (e.g. buybacks)." "We remain positive on ET given its robust yield and new distr. growth policy. We see ET's 3-5%/yr distr. growth target as sustainable through 2028. If the required return to own midstream is 12% (historical avg), we see ET yielding 8% (vs 10% today)."
And from Mstar - "Energy Transfer ’ s first-quarter results were healthy, and its raised full-year forecast is generally in line with ours." "The biggest news, in our view, was after several quarters of very rapid distribution increases to an annualized $1.22 a unit, growth was slowed this quarter to just a penny, or $1.23 annualized. For context, last quarter ’ s increase was a 75% increase over the prior year."
Price targets $16 - $17.50
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Post by Fearchar on May 10, 2023 17:34:27 GMT
Owned since 2014-15 so you can imagine what my cost basis is. If you can't, it's about $28. But, like the CEF guys say, I don't care. Really, I do but I held it just out of spite I guess. Anyway, Wells likes it so I'm going to keep it. From a recent report- "Investment Thesis - We have an Overweight rating on ET given the partnership's high distribution yield, robust free cash flow growth, and the potential for additional capital return over time as leverage declines (e.g. buybacks)." "We remain positive on ET given its robust yield and new distr. growth policy. We see ET's 3-5%/yr distr. growth target as sustainable through 2028. If the required return to own midstream is 12% (historical avg), we see ET yielding 8% (vs 10% today)." And from Mstar - "Energy Transfer ’ s first-quarter results were healthy, and its raised full-year forecast is generally in line with ours." "The biggest news, in our view, was after several quarters of very rapid distribution increases to an annualized $1.22 a unit, growth was slowed this quarter to just a penny, or $1.23 annualized. For context, last quarter ’ s increase was a 75% increase over the prior year." Price targets $16 - $17.50 As I understand, ET cut their distribution back in 2020. However, that was a precaution and their results could have supported the existing distribution. They have now raised it back and are committed to a longer term approach of gradually raising the distribution. Same business of mostly Nat gas in Texas. Current gas prices, while not rock bottom, are reasonable. So, I am still considering initiating a position. Appreciate Richard's suggested entry point and method.
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Post by Fearchar on May 10, 2023 17:52:28 GMT
Wait a minute....
Does share buyback really reduce leverage.
Fewer shares, but the same amount of debt.
So, wouldn't share buyback increase leverage?
BrK buys back since they have lots of cash, but I don't think they are highly leveraged.
ET has lots of leverage. Maybe I should understand their debt structure. If rates stay high for too long, they could run into problems if they have debt coming due.
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Post by mnfish on May 11, 2023 11:48:14 GMT
From Investopedia - " buying back some or all of the outstanding shares can be a simple way to pay off investors and reduce the overall cost of capital." " it can enable businesses that have a long-term need for capital financing to increase their equity without further diluting company ownership."
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Post by richardsok on May 11, 2023 14:33:00 GMT
Wait a minute.... Does share buyback really reduce leverage. Fewer shares, but the same amount of debt. So, wouldn't share buyback increase leverage? BrK buys back since they have lots of cash, but I don't think they are highly leveraged. ET has lots of leverage. Maybe I should understand their debt structure. If rates stay high for too long, they could run into problems if they have debt coming due. Debt/Equity: 1.74 Laddered over time, with $3.25 billion maturing in 2023, ~$3.7 billion maturing in 2024, $2.4 billion maturing in 2025, $1.55 billion maturing in 2026, and $3.05 billion maturing in 2027.
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Post by anitya on May 11, 2023 22:30:25 GMT
hi richardsok, The debt / equity may not give us an accurate picture of ability to rollover / refinance debt. Just looking at 9 P/E, makes me think they would be able to refinance without difficulty but one has to consider the dividend payout ratio. Retained cash flows (non-financing, non-capex, non-dividend cash flows) may be a better gaze for ability to refinance. I was concerned about the higher interest rates to refinance maturing debt of energy companies. But between 2015-2021, energy companies had to pay above market interest rates to borrow / refinance. So, may be they are already paying current market interest rates. If you already pulled the info, do you mind sharing at what interest rate are the above debts owed and what is the credit rating of those debts? Thanks.
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Post by richardsok on May 11, 2023 23:11:05 GMT
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