12 Best 5% Dividend Stocks To Buy According To Hedge Funds

7. Energy Transfer LP (NYSE:ET)

Number of Hedge Fund Holders: 29

Dividend Yield as of February 5: 6.25%

Energy Transfer LP (NYSE:ET) is a Texas-based energy company that is engaged in the pipeline transportation and storage for natural gas, crude oil, and other refined products. The company has one of the most promising growth pipelines in the midstream sector, planning to invest between $2.5 billion and $3.5 billion annually in growth capital expenditures (capex) to seize new opportunities. During its most recent earnings call, management highlighted strong demand from power generation companies and data center operators for natural gas pipeline projects, driven by the growing energy needs tied to the expansion of AI infrastructure.

Energy Transfer LP (NYSE:ET) has demonstrated strong operational and financial performance this year, setting several volume records in the latest quarter due to organic growth and strategic acquisitions. In November, it completed the $7.1 billion acquisition of Crestwood Equity Partners, following a $3.1 billion purchase of WTG Midstream in July. Furthermore, it successfully implemented two processing optimization projects, including the Red Lake III processing plant and a new pipeline connection between Midland and Cushing.

Energy Transfer LP (NYSE:ET) also demonstrated a strong cash position in the most recent quarter. Its distributable cash flow (DCF) rose by $4 million to $1.99 billion. The company saw strong throughput across its systems, setting several volume records during the period. On January 28, it declared a 0.8% increase in its quarterly dividend to $0.325 per share, marking the 13th consecutive quarterly dividend increase, which makes ET one of the best dividend stocks on our list. The stock has a dividend yield of 6.25%, as of February 5.

With a collective stake value of over $965.5 million, 29 hedge funds tracked by Insider Monkey held positions in Energy Transfer LP (NYSE:ET) in Q3 2024. With nearly 18 million shares, Abrams Capital Management was the company’s leading stakeholder in Q3.