10 Best Stocks to Invest in for Passive Income

7. Energy Transfer LP (NYSE:ET)

Number of Hedge Fund Holders: 37

Dividend Yield as of February 24: 6.85%

Energy Transfer LP (NYSE:ET) ranks seventh on our list of the best stocks to buy for passive income. The Texas-based energy company is engaged in pipeline transportation and storage for natural gas, crude oil, and other refined products. In the past 12 months, the stock has surged by over 29%, gaining investor attention. The company has benefited from acquisitions, recently completed expansion projects, and supportive market conditions. In recent quarters, it completed three major acquisitions: Lotus Midstream in May 2023, Crestwood Equity Partners in November 2023, and WTG Midstream in July 2024. In addition, it formed a joint venture with its affiliated MLP, Sunoco LP, to integrate its crude oil and produced water-gathering operations in the Permian Basin.

In the fourth quarter of 2024, Energy Transfer LP (NYSE:ET) reported revenue of $5.27 billion, marking a 6.6% decline from the previous year. However, its adjusted EBITDA rose 8% year-over-year to $3.88 billion, up from $3.60 billion. Looking ahead, the company expects adjusted EBITDA for 2025 to range between $16.1 billion and $16.5 billion. In addition, it has allocated approximately $5.0 billion for growth capital expenditures and around $1.1 billion for maintenance capital expenditures in 2025.

Energy Transfer LP (NYSE:ET) maintained a solid cash position, reporting a distributable cash flow of $1.98 billion. The company recently raised its quarterly dividend by 0.8% to $0.325 per share in January, extending its streak of consecutive dividend increases to 13 years. The stock supports a dividend yield of 6.85%, as of February 24.