Where Will Enterprise Product Partners Be in 5 Years?
The midstream energy space isn't exactly exciting, which is one of the big reasons why dividend-focused investors love it. That and the generally high yields, of course. Enterprise Products Partners (NYSE: EPD), a bellwether in the industry, is a favorite precisely because it is reliable, pays a fat distribution, and has a long history of rewarding investors with regular distribution increases. That said, there have been some changes going on at Enterprise that could have a big impact on the next few years. Here's what you need to know.
Enterprise has increased its distribution for 22 consecutive years. Within that streak is a run of over 60 consecutive quarterly distribution increases. The average annual increase over the past decade was roughly 5%, a couple of percentage points above the historical growth rate of inflation. That means that the buying power of Enterprise's distribution has been growing over time. Today, the master limited partnership's distribution yield is a generous 6.8%. That's over three times the dividend yield you would get from an S&P 500 index fund today.
Image source: Getty Images.
Source Fool.com
