Energy Transfer LP 29273VAL4 Bond
| ET Stock | USD 16.04 0.08 0.50% |
Energy Transfer LP holds a debt-to-equity ratio of 1.186. At this time, Energy Transfer's Short Term Debt is comparatively stable compared to the past year. Net Debt To EBITDA is likely to gain to 5.37 in 2024, whereas Long Term Debt is likely to drop slightly above 31.1 B in 2024. Energy Transfer's financial risk is the risk to Energy Transfer stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Energy Transfer's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Energy Transfer's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Energy Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Energy Transfer's stakeholders.
For most companies, including Energy Transfer, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Energy Transfer LP the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Price Book 1.4157 | Book Value 8.994 | Operating Margin 0.11 | Profit Margin 0.05 | Return On Assets 0.0489 |
Energy |
Given the importance of Energy Transfer's capital structure, the first step in the capital decision process is for the management of Energy Transfer to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Energy Transfer LP to issue bonds at a reasonable cost.
| Popular Name | Energy Transfer ET 675 |
| Specialization | Oil & Gas Midstream |
| Equity ISIN Code | US29273V1008 |
| Bond Issue ISIN Code | US29273VAL45 |
| S&P Rating | Others |
| Maturity Date | Others |
| Issuance Date | Others |
Energy Transfer LP Outstanding Bond Obligations
| US29273VAF76 | US29273VAF76 | Details | |
| US29273VAH33 | US29273VAH33 | Details | |
| ET 555 15 FEB 28 | US29273VAP58 | Details | |
| ET 575 15 FEB 33 | US29273VAQ32 | Details | |
| ET 675 | US29273VAL45 | Details | |
| Energy Transfer 7125 | US29273VAM28 | Details | |
| US29273VAN01 | US29273VAN01 | Details |
Understaning Energy Transfer Use of Financial Leverage
Energy Transfer financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Energy Transfer's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Energy Transfer assets, the company is considered highly leveraged. Understanding the composition and structure of overall Energy Transfer debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it. Financial leverage can amplify the potential profits to Energy Transfer's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Energy Transfer's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 53.2 B | 30 B | |
| Net Debt | 53.1 B | 29.7 B | |
| Short Term Debt | 1.1 B | 1.1 B | |
| Long Term Debt | 51.4 B | 31.1 B | |
| Long Term Debt Total | 55.5 B | 38.9 B | |
| Short and Long Term Debt | 1 B | 571 M | |
| Net Debt To EBITDA | 4.03 | 5.37 | |
| Debt To Equity | 1.21 | 1.15 | |
| Interest Debt Per Share | 17.65 | 15.40 | |
| Debt To Assets | 0.47 | 0.57 | |
| Long Term Debt To Capitalization | 0.54 | 1.06 | |
| Total Debt To Capitalization | 0.55 | 1.06 | |
| Debt Equity Ratio | 1.21 | 1.15 | |
| Debt Ratio | 0.47 | 0.57 | |
| Cash Flow To Debt Ratio | 0.18 | 0.1 |
Pair Trading with Energy Transfer
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Energy Transfer position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Energy Transfer will appreciate offsetting losses from the drop in the long position's value.Moving together with Energy Stock
| 0.94 | AM | Antero Midstream Partners | PairCorr |
| 0.85 | EE | Excelerate Energy | PairCorr |
The ability to find closely correlated positions to Energy Transfer could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Energy Transfer when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Energy Transfer - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Energy Transfer LP to buy it.
The correlation of Energy Transfer is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Energy Transfer moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Energy Transfer LP moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Energy Transfer can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out the analysis of Energy Transfer Fundamentals Over Time. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Complementary Tools for Energy Stock analysis
When running Energy Transfer's price analysis, check to measure Energy Transfer's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Energy Transfer is operating at the current time. Most of Energy Transfer's value examination focuses on studying past and present price action to predict the probability of Energy Transfer's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Energy Transfer's price. Additionally, you may evaluate how the addition of Energy Transfer to your portfolios can decrease your overall portfolio volatility.
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Is Energy Transfer's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Energy Transfer. If investors know Energy will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Energy Transfer listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.003 | Dividend Share 1.255 | Earnings Share 1.09 | Revenue Per Share 25.146 | Quarterly Revenue Growth 0.139 |
The market value of Energy Transfer LP is measured differently than its book value, which is the value of Energy that is recorded on the company's balance sheet. Investors also form their own opinion of Energy Transfer's value that differs from its market value or its book value, called intrinsic value, which is Energy Transfer's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Energy Transfer's market value can be influenced by many factors that don't directly affect Energy Transfer's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Energy Transfer's value and its price as these two are different measures arrived at by different means. Investors typically determine if Energy Transfer is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Energy Transfer's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.