A Fat Energy Div­i­dend

The Saratogian (Saratoga, NY) - - BUSINESS -

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.)

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