Here’s Why Energy Transfer Stock Is a Buy Before Nov. 6

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It’s important to take the long-term view when investing. You should think in terms of years and decades, not months and days. However, it’s also wise to keep an eye on the calendar before investing to get ahead of a potential catalyst.

Those interested in buying midstream giant Energy Transfer (NYSE: ET) should circle Nov. 6 on their calendar. It’s an important date for the master limited partnership (MLP) because it precedes the company’s next earnings report and distribution payment. Here’s why investors might want to buy before that date.

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Energy Transfer will report its third-quarter earnings after the market closes on Nov. 6. The midstream giant will likely report strong results.

The company is coming off an excellent second quarter. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 20% to $3.8 billion, while its distributable cash flow soared 32% to $2 billion. The MLP delivered record volumes across several segments, fueled by strong market conditions, recently completed expansion projects, and acquisitions.

That strong momentum likely flowed into the third quarter. Energy Transfer should continue to benefit from its needle-moving merger with Crestwood Equity Partners, which closed last November. In addition, it should continue to get a boost from recently completed expansion projects, including two new ones that started service in July, which should impact its results in the third quarter. And the company closed its highly accretive $3.1 billion acquisition of WTG Midstream in July.

Meanwhile, the company will likely provide an update on its progress in securing additional expansion projects. For example, it took another step toward finally approving its long-delayed Lake Charles LNG project last month. Securing additional expansion projects would further enhance its growth outlook.

Units of Energy Transfer are already up about 20% this year. Reporting stronger-than-expected third-quarter results or progress on securing additional expansion projects could give it more fuel to continue rallying. Because of that, investors might get a better price if they buy before Energy Transfer reports earnings.

Energy Transfer recently declared its latest distribution payment of $0.3225 per unit. That’s a $0.0025-per-unit increase from last quarter and a 3.2% pay bump compared to the year-ago level. That aligns with the MLP’s plan to increase its distribution by 3% to 5% annually.

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