3 Stocks With High Dividend Yields
A high dividend yield can boost the income you generate from your portfolio. But yield alone is not the best way to select a stock; you need to dig into the story and the stock a bit more than that. Here are three vastly different investing options with high yields that are likely to keep paying you handsomely for years to come.
Enterprise Products Partners (NYSE: EPD) is a master limited partnership (MLP). MLPs come with some extra tax issues, such as having to deal with a K-1 come tax time, but often have generous distributions. Enterprise's yield is a lofty 7.4%. The company operates in the midstream segment of the energy sector. Energy prices and stocks tend to be volatile, rising and falling in often dramatic fashion, but Enterprise is a bit different. It owns the infrastructure that helps to move energy, charging fees for the use of its assets. That generates reliable and fairly consistent cash flow.
The best example of this is the fact that Enterprise has increased its distribution every year for 24 consecutive years. But there are some other interesting facts to note. For example, the partnership's balance sheet is investment-grade-rated, meaning it has a strong financial foundation. And distributable cash flow covered the distribution by a huge 1.9 times over the past year, so there is a lot of room for adversity before a distribution cut would be in the cards. The distribution is likely to be the biggest part of total return here, but investors looking for a reliable income stream from a traditionally volatile sector like energy should like what they see.
Source Fool.com
