Energy Transfer Partners (NYSE: ETP) is popular among income seekers because of its rich 12% yield.

I’ve covered the stock several times in this column, most recently in January when the stock received an F for dividend safety.

At the time, the big concern was that despite management’s goals of generating $1.05 in cash flow for every $1 it paid in dividends, it was falling short. In fact, the company’s cash flow was below what it was paying shareholders, which is a problem – particularly for a company with lots of debt like Energy Transfer Partners.

Great Track Record

The company has raised its dividend for 16 years in a row, including increases every quarter since 2005.

That was still the case earlier in the year when Energy Transfer received an F. What has changed is its distributable cash flow (DCF) – the measure of cash flow used by master limited partnerships (MLP).

Energy Transfer is generating much more cash than it was last year.

In fact, its DCF has doubled.

Through the first six months of the year, Energy Transfer’s DCF was $1.9 billion, compared with just $990 million a year ago.

The company paid $1.6 billion in distributions (MLP’s dividends are called distributions) for a distribution coverage ratio of 1.15. In other words, Energy Transfer generated $1.15 in cash flow for every $1 it paid shareholders.

For the full year 2016, the coverage ratio was a low 0.87. So last year it did not generate enough cash to afford the distributions it paid.

Now that Energy Transfer is generating enough cash to pay the distribution and has the impressive dividend-raising history, its safety rating has been upgraded significantly.

The one concern is debt. It has $32 billion in debt, compared with $29 billion in equity.

But for now, as long as the company’s cash flow remains comfortably above its distributions paid, the distribution appears fairly safe.

This was one of the more impressive upgrades in SafetyNet Pro’s history. You don’t see many Fs get upgraded so many levels – particularly if they have a 12% yield.

Dividend Safety Rating: B

If you have a stock whose dividend safety you’d like me to analyze, leave the ticker symbol in the comments section.