Is Enterprise Products Partners Stock a Buy?
Investors looking for a generous yield will likely be attracted to Enterprise Product Partners' (NYSE: EPD) fat 7.8% yield. That's a huge five times larger than what you would get from an S&P 500 Index fund today. That alone, however, isn't a good reason to buy this high-yielder. Here are some things to think about before you step onboard.
Since the distribution is probably what attracts most dividend investors to Enterprise, it makes sense to start with the payment. The yield is not just large, it is also well supported. In 2020, a very difficult year for companies in the energy sector, Enterprise covered its distribution with distributable cash flow by 1.6 times. That leaves a material amount of room for adversity before a distribution cut is a serious threat.
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Source Fool.com
