The broader market has been quite volatile this year amid the noise surrounding tariffs, recession fears, and heightened geopolitical tensions. For conservative investors, low-beta dividend stocks can provide some relief from the broader market volatility.
Midstream energy companies are especially popular among investors seeking high-yield dividend stocks, as they are known to pay substantial dividends. I find Energy Transfer (ET) a good buy in that space, especially after the recent pullback where the stock has lost over 17.7% from its 2025 highs.
To begin with, let’s look at ET’s current dividend and dividend policy. Energy Transfer’s current dividend yield is above 7.4%, and the company intends to increase its distribution by between 3%-5% annually. However, there is a red flag if you put great emphasis on dividend certainty, as in 2020, Energy Transfer was forced to cut its distribution by half. While several companies either cut their dividends or suspended them altogether during the pandemic, some of ET’s peers, specifically Enterprise Products (EPD), increased their dividends. EPD has incidentally increased its dividends every year since it went public in 1998, and the current yield sits just under 7%.
Energy Transfer has several growth drivers in its arsenal, which should bolster its earnings and, by extension, its dividends in coming years. The first is the export market, and the Flexport expansion project should enhance the company’s export capabilities. ET expects to commence ethylene export service from the Nederland Terminal in the final quarter of this year.
President Donald Trump has talked about “unleashing American energy,” and energy exports could be one way through which the country can bridge its burgeoning trade deficit. Energy Transfer has been praised the Trump administration’s energy policies, including easier permits. During the Q1 2025 earnings call, co-CEO Marshall McCrea said, “We think the decisions that this administration [makes] will be very good for our country and very good for our industry and very good for our partnership.” The other key growth driver for Energy Transfer could be the electricity demand from data centers and any potential onshoring of manufacturing activity.
