The 8% Dividend Stock to Own

• The stock’s struggles in 2025 could provide investors with a buying opportunity.

• The 8% dividend yield is eye-catching and, more importantly, sustainable.

• New projects could be catalysts for long-term growth.

• 10 stocks we like better than Energy Transfer ›

Although the group’s returns are positive, energy is one of seven lagging sectors S&P500 so far this year. Some stocks were hit harder than others.

Consider an intermediary operator Energy transfer (NYSE:ET). This stock is down nearly 17% year to date as I write this, a decline that has pushed its dividend yield at around 8%. Combine this decline during a time of broader market strength with this eye-popping return, and it’s reasonable for some investors to view the energy transfer as a potential. yield trap. But I don’t think that’s the case.

The recently had company announced the shutdown of its massive Lake Charles liquefied natural gas (LNG) project, potentially freeing up resources that can be allocated to the higher-potential Desert Southwest expansion plan.

The company also posted stable adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) growth and makes efforts to effectively manage debt.

The pipeline operator’s desired net debt-to-EBITDA ratio of 4 to 4.5 is a priority as it aligns with its peers while mitigating the risk of losing its investment grade credit rating. The dividend is further supported by expectations that Energy Transfer’s long-term financial position will improve as new projects come online, potentially strengthening free cash flow (FCF) generation.

Longer term, investors may not fully understand that Energy Transfer is to some extent exposed to growing data center demand. The company says Desert Southwest’s expansion is aimed at meeting “additional customer demand” and that data centers could be part of that equation.

When it comes to data centers, at least two factors are widely known. First, hyperscalers seek to source natural gas from basin projects before it hits the open market. Second, some of the richest gas basins are in Texas, which is also a growing hub for data centers. These factors are important in the Entergy Transfer debate because the company is the largest operator of intrastate pipelines in the Lone Star State. It is therefore logical to assume that it will benefit from data center-driven demand.

Before buying Energy Transfer stock, consider this:

THE Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and Energy Transfer was not one of them. The 10 selected stocks could produce monster returns in the years to come.

Consider when Netflix made this list on December 17, 2004…if you had invested $1,000 at the time of our recommendation, you would have $509,470!* Or when Nvidia made this list on April 15, 2005…if you had invested $1,000 at the time of our recommendation, you would have $1,167,988!*

Now it’s worth noting Equity Advisor the total average return is 991% – an overwhelming market outperformance compared to the 196% for the S&P 500. Don’t miss the latest top 10, available with Equity Advisorand join an investor community built by individual investors for individual investors.

See the 10 values ​​»

*Stock Advisor returns December 22, 2025

Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Mad Motley has a disclosure policy.

Energy Transfer: The 8% Dividend Stock to Own was originally published by The Motley Fool