Energy Transfer’s Co-CEO and Executive Chairman Just Increased Their Shares in the Company. Should You Invest in It Too?

Company insiders buy units Transferring energy (ET -0.99%) recently. Co-founder and executive chairman Kelcy Warren recently bought another 3 million units of the midstream giant, while co-CEO Thomas Long bought an additional 20,000.

Warren currently has almost 301.5 million units, while Long now has almost 1.1 million, according to Capital IQ data. Warren is largest shareholder of the limited liability partnership (MLP) with 8.8% of shares outstanding individualsInsiders own more than 10% of outstanding shares, which is by far the highest percentage among the country’s largest companies. Pipeline companies.

High insider ownership aligns the board’s interests with those of outside shareholders. Meanwhile, such purchases typically signal that insiders are optimistic about the company’s prospects.

Energy Transfer insiders have reason to be optimistic. The MLP’s growth momentum has accelerated rapidly, fueled by recently completed organic expansion projects, strong market conditions, and accretive acquisitions. Its operations set several volume records in the second quarter, which helped generate a 32% increase in distributable cash flow.

This midstream giant is in strong position to continue to add value to investors in the future. It recently completed another acquisition, buying WTG Midstream for nearly $3.1 billion. The company expects this transaction alone to add $0.07 per unit to its distributable cash flow by 2027. That would be enough to support distribution growth (3% to 5% per year, or about $0.01 per unit) for several years.

Energy Transfer pays investors a cash dividend that currently yields almost 8% of profit, which is several times more than S&P500 efficiency less than 1.5%.

The growing income stream alone makes MLPs an attractive investment for those who are willing to receive Schedule K-1, federal tax form Such entities send investors every year for tax purposes. Add his height, AND Transferring energy is currently an attractive investment opportunity, Which is why it’s no surprise that insiders are buying.