Better Buy: Energy Transfer's 7.7% Yield Or USA Compression's 11.8%

Jul. 20, 2022 8:00 AM ETEnergy Transfer LP (ET), USACET.PC, ET.PD, ET.PE220 Comments

Summary

  • Energy Transfer and USA Compression are both midstream MLPs with very stable cash-flowing business models.
  • While USAC's yield is ~410 basis points greater than ET's, ET boasts a meaningfully higher credit rating, implying a lower risk profile.
  • We compare the business models, balance sheets, growth potential, and valuation to determine which is the better buy today.
  • Looking for a portfolio of ideas like this one? Members of High Yield Investor get exclusive access to our model portfolio. Learn More »

Blue balanced geometric shapes

adaask

Energy Transfer (NYSE:ET) and USA Compression Partners (NYSE:USAC) are both midstream MLPs with very stable cash-flowing business models. While USAC's yield is ~410 basis points greater than ET's, ET boasts a meaningfully higher credit rating, implying a lower risk

USAC vs ET price
Data by YCharts

If you want access to our Portfolio that has crushed the market since inception and all our current Top Picks, join us for a 2-week free trial at High Yield Investor.

We are the fastest growing high yield-seeking investment service on Seeking Alpha with ~1,350 members on board and a perfect 5/5 rating from 145 reviews.

Our members are profiting from our high-yielding strategies, and you can join them today at our lowest rate ever offered.

You won't be charged a penny during the free trial, so you have nothing to lose and everything to gain.

Start Your 2-Week Free Trial Today!

This article was written by

Samuel Smith profile picture
19.52K Followers
Become a “High Yield Investor” with our 8% Yielding Portfolio.

Samuel Smith is Vice President at Leonberg Capital and manages the High Yield Investor Seeking Alpha Marketplace Service.


Samuel is a Professional Engineer and Project Management Professional by training and holds a B.S. in Civil Engineering and Mathematics from the United States Military Academy at West Point. He is a former Army officer, land development project engineer, and lead investment analyst at Sure Dividend.

Disclosure: I/we have a beneficial long position in the shares of ET either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (220)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.