Dividend Stock: Enterprise Products Partners Yields Sizzling 7.6%

Enterprise Products Partners (EPD) is in focus in this week’s Income Investor, boasting a sizzling 7.6% yield and a long track record of increases for the dividend stock.


The Houston-based company operates over 50,000 miles of crude oil and natural gas pipelines. It also maintains natural gas storage facilities and processing sites.

While master limited partnerships like Enterprise Products are not officially eligible for the S&P Dividend Aristocrat list, the company’s dividend history rivals that of the aristocrats.

Enterprise Products increased its dividend 25 straight years, equating to increases every year since inception. The most recent hike, last quarter, increased the dividend to 50 cents per share, bringing the annualized yield to a juicy 7.6%.

Conservative income-oriented investors should always consider exposure to pipelines due to their large distributions and steady nature of cash flows.

Dividend Stock A Steady Performer

Unlike many other high-yielding names, Enterprise Products is remarkably stable. Since IBD’s last discussion on Enterprise Products in February, S&P Global further upgraded its debt, and it now boasts an enviable A- rating.

This is not to suggest the company is immune to changes in energy prices, which softened after an advance. Enterprise Products reported second-quarter earnings on Aug. 1 with EPS of 57 cents and distributable cash flow of $1.7 billion.

These results were worse than a year prior, when it reported 67 cents EPS as weaker energy prices took their toll on margins. Nevertheless, the weaker results were already priced in, with the dividend stock closing virtually unchanged after the results. Positively, the company projects solid results ahead.

It expects 2023 earnings will remain stable this year from a year prior at $2.54 per share, before increasing to $2.68 in 2024. That should provide ample support to continue high quarterly distributions.

Shares of dividend stock Enterprise Products have been trading in a rangebound base for many months, according to IBD MarketSmith. A handle can be identified with a 27.28 buy point.


The Income Investor archive

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

IBD Live: Learn And Analyze Growth Stocks With The Pros

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

Leave a Comment