A Fat Energy Dividend
Enterprise Products Partners (NYSE: EPD), a master limited partnership (MLP), is one of the largest midstream companies in the energy sector. It generates lots of steady cash flow, and has already hauled in nearly $5 billion through the first nine months of this year, 14% more than its year-ago level. It distributed about 60% of that money to its investors via a dividend, which recently yielded an attractive 6.7%, and reinvested the rest into expanding its operations.
Enterprise Products currently has $9.1 billion of growth projects under construction, including expanding several of its pipelines, building new export facilities and constructing another petrochemical plant. These projects should be coming online through 2023 and provide Enterprise with the fuel to continue boosting its payouts, which it has done for 22 consecutive years.
Despite the MLP’s success in 2019, its shares have gone on sale over the past few months, and it recently sported one of the lowest valuations in the sector. Between the cheap price, the above-average yield and the highly visible growth prospects, Enterprise Products Partners is well worth a closer look.
Note that MLPs require more paperwork come tax time. You may want an accountant’s help with that. (The Motley Fool has recommended Enterprise Products Partners.)