Enterprise Product Partners: Do You Need to Worry About a Distribution Cut?
Enterprise Products Partners (NYSE: EPD) let a very impressive streak come to an end in 2020. After increasing its distribution for 62 consecutive quarters, it held the disbursement flat when it announced it in May. The reason is pretty obvious: The energy markets are in disarray following the drop in demand related to COVID-19 economic shutdowns.
But how worried should investors be about the sustainability of the 10% yield and the potential for an eventual cut to the distribution? Here are some things you should be thinking about right now.
The supply/demand imbalance in the energy sector is very big. There was too much supply going into the COVID-19 pandemic, but when economies began to shut down to slow its spread of the coronavirus, there was also a material drop in demand.
Source Fool.com
