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5-Star Stocks Poised to Pop: Energy Transfer Partners

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 7:56PM

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Market-trouncing returns could be written in this five-star stock.

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, natural gas transporter Energy Transfer Partners (NYSE:ETP) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Energy Transfer's business, and see what CAPS investors are saying about the stock right now.

Energy Transfer facts

Headquarters (founded)

Dallas, Texas (2002)

Market Cap

$5.33 billion

Industry

Oil and gas storage and transportation

TTM Revenue

$7.03 billion

Management

CEO Kelcy Warren
COO Marshall S. McCrea, III

TTM Return on Equity

26%

Dividend Yield

10.1%

Competitors

Enterprise Products Partners (NYSE:EPD)
Enbridge Energy Partners (NYSE:EEP)

CAPS members bullish on ETP also bullish on

Freeport-McMoRan Copper & Gold (NYSE:FCX)
Chesapeake Energy (NYSE:CHK)

CAPS members bearish on ETP also bearish on

Cabot Oil & Gas (NYSE:COG)
Cephalon (NASDAQ:CEPH)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 105 of the 110 All-Star members who have rated Energy Transfer -- some 98% -- believe the stock will outperform the S&P 500 going forward. These bulls include terryg8 and Cmoor, both of whom are ranked in the top 20% of our community.

In October, terryg8 weighed the stock's pros and cons for our community:

The dividend is there and they have 10 years worth of contracts to keep the cash flowing. Downside is the difficulties in funding additional projects or expansions. This is a solid buy with a great yield!

In a pitch from late last month, Cmoor shares that sentiment, highlighting Energy Transfer's dynamic dividend yield (which has come down slightly over the last few weeks): "ETP management has it well positioned to continue building out its pipelines and other transfer businesses, with adequate cash flow to maintain the dividend distributuion, as well. With the price beaten down, that dividend is now well over 10%."

What do you think about Energy Transfer, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool’s own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro, and to receive a private invitation to join, simply enter your email address in the box below.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Enterprise Products is a Motley Fool Income Investor pick. Chesapeake Energy is a selection of Inside Value. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

Freeport-McMoRan Inc. Stock Quote
Freeport-McMoRan Inc.
FCX
$31.67 (0.86%) $0.27
Chesapeake Energy Corporation Stock Quote
Chesapeake Energy Corporation
CHKA.Q
Coterra Energy Inc. Stock Quote
Coterra Energy Inc.
CTRA
$29.33 (5.88%) $1.63
Enterprise Products Partners L.P. Stock Quote
Enterprise Products Partners L.P.
EPD
$26.84 (1.63%) $0.43
Enbridge Energy Partners, L.P. Stock Quote
Enbridge Energy Partners, L.P.
EEP

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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