This High-Yield Stock Comes With a High Risk
The lure of Energy Transfer's (NYSE: ET) high yield is difficult to ignore, especially when the stock has fallen to such attractive levels. Speculating on where Energy Transfer stock is headed is difficult. However, there are factors that contributed to its fall, and those concerns are far from resolved. In fact, worries have risen even more.
Energy Transfer's debt levels have always been a concern of investors. The company's long-term debt rose from $43.4 billion at the end of 2018 to $51 billion at the end of 2019. For comparison, Enterprise Products Partners' (NYSE: EPD) debt roughly doubled in the last ten years, while that of Energy Transfer's rose more than four times over the same period. Similarly, Energy Transfer's debt-to-EBITDA (earnings before interest, taxes, depreciation, and amortization ratio) has historically been much higher than that of Enterprise Products Partners and many of its peer group.
Source Fool.com
