Dear Fellow Investor,
This afternoon, I appeared with Celeste Lindman to discuss the power of dividend stocks. And during our conversation, she gave away some of the best long-term dividend stocks for investors to buy and hold to generate tremendous income.
One of the names she mentioned today was Energy Transfer (NYSE: ET), a midstream energy company that pays a remarkable 9.5% dividend. Today, I want to highlight why I would add this name to my long-term portfolio.
The company is involved in transporting, storing and distributing energy resources, primarily focusing on natural gas, natural gas liquids (NGLs) and crude oil.
The Energy Transfer family includes several entities and owns an extensive network of pipelines and other infrastructure that facilitated the movement of energy products across the United States.
Just how big is this company and its assets? It owns 125,000 miles of pipeline, enough to wrap around the world five times. It operates in 44 states and every major oil basin in the nation. And it has stakes in three major players that investors need to recognize.
First, it owns the Lake Charles LNG company, which will be a massive player in the export of natural gas to energy-hungry regions of the world like Europe.
Second, it owns about 47% of another great dividend stock called USA Compression Partners, LP (NYSE: USAC), which pays an 8.7% dividend and is poised to benefit from the rise of U.S. natural gas exports.
Third, it owns about 34% of the common units of Sunoco LP (NYSE: SUN), one of the most successful downstream operators.
In fact, Energy Transfer has incorporated the operations of 15 organizations over the last 20 years, making it an absolute powerhouse in the midstream operations of U.S. fuels.
But there’s one more benefit to this Master Limited Partnership and why I would include it in my portfolio. Someone very important has made an incredible bet on the stock — and this buying could signal that the company’s best days are still ahead of it.
The Insiders are Buying Big on Energy Transfer
Kelcy Warren is the Executive Chairman of Energy Transfer. And over the last 18 months, he has engaged in one of the largest insider buying campaigns of a company’s stock in nearly a decade.
Warren has made huge bets. They include a $38 million buy in August, and two more purchases of more than $13 million in November. Executives at the company have also made sizable purchases over the last two years. Insider buying at the company has swelled to more than $256 million in Energy Transfer stock in the last 24 months.
Even more impressive, no one at the company has been selling their stock. The chart below from SECForm4.com shows the incredible buying over this period.
And it’s not just Kelcy Warren buying tens of millions of dollars in stock… Other executives have gotten in on the action as well. The company’s co-CEO just bought more than $659,000 in shares on Dec. 12. An Executive Vice President bought more than $105,000 in mid-November. And another EVP slapped down $131,000 of their own money in early November.
Remember, executives could sell their stock for any number of reasons. But as the great Peter Lynch once said, “they buy them for only one: They think the price will rise.”
Energy Transfer is one of the rare names that can provide huge total returns over the next decade thanks to appreciation upside and cold-hard cash in the form of dividends. This is a set-and-forget company — and I’m so glad Celeste brought it up today.
If you want to see our replay of the event, be sure to check out this link, right here.
Chat soon,
Garrett Baldwin
*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
P.S. Everyone Needs a Little Extra Income — Let Celeste Show You the Way!
Look, the fact of the matter is that people really need some extra income right now.
And, no, I’m not talking about trading stocks… selling options… nothing like that.
I’m talking about the heart of income — dividend stocks.
The tried-and-true companies that pay time and time again — without us needing to lift a finger.
Celeste and I just gave our THREE basic rules to building your very own Ultimate Dividend Portfolio…
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Market Momentum is GREEN
Markets continue to run higher as we received positive news from the Federal Reserve and the U.S. economy looks like it will avoid a recession next year.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
