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Why Energy Transfer Partners Didn't Strike It Rich in 2011

As 2011 comes to a close, it's a great time to look back at what happened to the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at Energy Transfer Partners (NYSE: ETP  ) . The energy company has historically run a variety of businesses ranging from gas processing and transportation to retail propane sales. But with the boom in shale plays, natural gas prices have remained low, leading the company to make some significant strategic moves. Below, I'll take a closer look at the events that moved shares of Energy Transfer Partners this year.

Stats on Energy Transfer Partners

Year-to-Date Stock Return (7.4%)
Market Cap $10.1 billion
1-Year Revenue Growth 9.3%
1-Year Profit Growth 5.8%
Cash / Debt $139 million / $8.08 billion
Dividend Yield 7.9%
CAPS Rating *****

Source: S&P Capital IQ.

Why did Energy Transfer Partners fall this year?
Energy Transfer Partners is a master limited partnership under the umbrella of general partner Energy Transfer Equity (NYSE: ETE  ) . The MLP structure is one that many energy companies -- including Cheniere Energy Partners (AMEX: CQP  ) and Inergy (NYSE: NRGY  ) -- use as a tax strategy, and it often produces attractive dividend yields.

This year, consolidation within the industry has taken center stage. Energy Transfer Equity won a bidding war to acquire Southern Union (NYSE: SUG  ) , while rival Kinder Morgan made an even bigger deal, agreeing to buy out El Paso (NYSE: EP  ) in a huge $21.1 billion deal. In addition, Energy Transfer Partners agreed to sell its propane business to AmeriGas Partners (NYSE: APU  ) for $2.8 billion.

One long-term problem that has weighed on Energy Transfer Partners is its debt. Although high debt levels aren't uncommon in the industry, debt still acts as a threat to future dividends and a barrier to further expansion and growth.

The best case for Energy Transfer Partners would be for natural gas infrastructure to become a high priority for the nation. So far, that hasn't happened, which is why the stock has remained in a holding pattern. But when natural gas becomes easier to use -- as many have long predicted -- then the stock could be well-placed to soar.

In fact, there's another hot stock that's on the forefront of providing exactly that sort of solution to make it easier to use natural gas. You can read all about it in this free special report -- but it's only available for a limited time, so grab it right now.

Click here to add Energy Transfer Partners to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.

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