Energy Transfer (NYSE: ET), one of the largest midstream companies in the United States, is a reliable stock for earning passive income.
As a pipeline operator, it’s well-insulated from volatile oil and gas prices because it merely charges other companies “tolls” to use its infrastructure
It’s also a master limited partnership (MLP) that blends a return of capital with its own income to pay distributions that are more tax-efficient than conventional dividend-paying energy stocks. You’ll need to file a separate tax form for that income, but you can use the MLP’s reported losses to reduce your taxable income because you’re a “partner” rather than an investor. The portion of your distributions classified as a “return of capital” is also tax-deferred until you sell.
Can Energy Transfer give you $10,000 in annual passive income? Energy Transfer has a forward yield of 7.05%. That seems high, but its total distributions only accounted for 56% of its adjusted distributable cash flow (DCF) in 2025.