That said, keep in mind that the clock is ticking on Energy Transfer’s unusually large dividend.Article printed from InvestorPlace Media, https://investorplace.com/2020/07/energy-transfer-et-stock-stranded-in-the-dakotas/.Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. The companies have already filed a motion to stay in hopes that oil will continue to flow through the pipeline. A Native American tribe had opposed the pipeline and didn’t drop their case even after the pipeline opened.Many investors assumed that the legal risks wouldn’t be too severe, given the Trump Administration’s pro-fracking policy. However, shares surged back to $9 recently, as investors feasted on its huge dividend and improved prospects as oil and natural gas prices bounced.Over the past week, however, the momentum has reversed itself yet again. Energy Transfer (NYSE:ET) -0.2% after-hours as it swings to an $855M Q1 loss, which included $1.3B in non-cash goodwill impairments due to decreases in … Up until now, Energy Transfer has resolutely refused to cut its dividend despite the oil and gas bust. Traders already hated the sector coming into 2020, and then things went from bad to worse in March.Buffett’s big splash in the midstream space could finally trigger a short-term sentiment reversal. A payout that high is usually a warning sign that a cut is right around the corner. The company is facing lost revenue while DAPL is offline and the potential loss of a contract with , which recently filed for bankruptcy.
That income stream will dry up -- at least temporarily -- as the DAPL undergoes its environmental review.

Copyright © 2020 InvestorPlace Media, LLC. Refining giant The court's ruling on DAPL is just the latest in a series of blows to Energy Transfer's earnings. Now, instead, Dominion has cancelled the Atlantic project, and sold much of its existing natural gas assets to Berkshire.Two, Berkshire’s purchase signals that natural gas pipelines are still a good industry. The Dakota Pipeline operators took out $2.5 billion in debt last year.

ET's next quarterly dividend payment will be made to shareholders of record on Wednesday, August 19. Nasdaq The company entered the year under some pressure due to the roll off of legacy pipeline contracts, and some margin compression as a result of more competitive market conditions. On a positive note, Energy Transfer believes it will start producing positive cash flow in 2021 after paying its dividend and funding capital expenses.

Investing Basics That could include asset sales or a major dividend cut. The system has the capacity to transport 570,000 barrels of oil per day (BPD), though Energy Transfer has been seeking support to expand it up to 1.1 million BPD. FMR LLC purchased a new position in Energy Transfer LP Unit in the first quarter valued at about $16,012,000. Stock Market

… Add that to all its other issues, and there's an increased risk that it might need to reduce its dividend so that it doesn't put its balance sheet in jeopardy.Cumulative Growth of a $10,000 Investment in Stock AdvisorIs Energy Transfer's 18%-Yielding Dividend in Trouble Now that Dakota Access Must Shut Down? Unfortunately, market conditions went from bad to worse this year due to crashing crude prices. However, an individual court can buck the party line, as happened in this case.Here’s where things get messy. Energy Transfer believes that it can generate enough cash this year to fund its payout and the bulk of its capital expenses, which will help keep it from putting more pressure on its balance sheet.


In addition to that cash flow hit, Energy Transfer and its partners will need to spend more money on their legal defense and any related costs. 1125 N. Charles St, Baltimore, MD 21201. About Us Matthew is a senior energy and materials specialist with The Motley Fool. @themotleyfool #stocks $ET $PSX $PSXP That was more than the $2.8 billion that it earned in net income. Energy Transfer LP Unit pays an annual dividend of $1.22 per share, with a dividend yield of 18.68%. Returns as of 08/14/2020. Increasingly, folks have avoided pipelines and master limited partnerships (MLPs) because of poor returns and a questionable long-term outlook for the industry.

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