Enterprise Product Partners (EPD) at Income Investor this week, boasting a high yield of 7.6% and a long record of increases for dividend stocks.
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The Houston-based company operates more than 50,000 miles of crude oil and natural gas pipelines. It also maintains natural gas storage facilities and processing sites.
While master limited partnerships such as Enterprise Products do not formally qualify for the S&P Dividend Aristocrat list, the company’s earnings history rivals that of the aristocrats.
Enterprise products Its profits have increased by 25 consecutive years, equalized increases each year since the beginning. The recent rally in the most recent quarter boosted earnings to 50 cents per share, which pushed the annualized yield to 7.6%.
Conservative investors who focus on income should always consider exposure to pipelines because of their large dividends and steady nature of cash flows.
Dividend stocks perform consistently
Unlike many other high-yield names, Enterprise products are remarkably stable. Since IBD’s last discussion of Enterprise Products in February, S&P Global has upgraded its debt, and it now has an enviable A- rating.
That doesn’t mean the company is immune to changes in energy prices, which have softened after advance. Enterprise products You reported second quarter earnings on August 1 with EPS of 57 cents and distributable cash flow of $1.7 billion.
Those results were worse than a year earlier, when it reported 67 cents EPS as weaker energy prices hit margins. However, weaker results have already been priced in, with dividend stocks closing nearly unchanged after results. On a positive note, the company expects strong results in the future.
It expects 2023 earnings to remain stable this year compared to the previous year at $2.54 per share, before rising to $2.68 in 2024. This would provide significant support for continuing high quarterly dividends.
Shares of Enterprise Products dividend stock have been trading in a limited range for several months, according to IBD MarketSmith. The handle can be identified with a buy point of 27.28.
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