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Billionaire investors such as Warren Buffet made their wealth investing in dividend stocks, with portfolios consisting of stocks that offer a blend of stable income, high growth, and safety.
One trending dividend aristocrat has all of the characteristics of a good income stock: Enterprise Products Partners LP (NYSE:EPD)
The American midstream natural gas and crude oil pipeline company is a large-cap stock with a market cap of $61.72 billion as of June 2024. EPD is among institutional investors’ favorite stocks today with top hedge funds owning 25.55% of its shares.
Moreover, it’s currently offering a trailing yield of 7.25%, compared to the industry average of 4.38% and 1.3% for the S&P 500. EPD has paid increasing quarterly dividends consistently since 1998, with an annual growth rate of 3.90% over the last decade.
The stock has a high payout ratio of 79.53% compared to the industry’s average of 39.84%, but this shouldn’t be a concern since its strong financial position demonstrates its dividend sustainability. EPD has a recession-proof business model, with at least 60% of its revenues coming from long-term fixed-fee contracts.
As of June 2024, the company has a whopping $6.9 billion in projects under construction, including a natural gas processing plant. The new projects are expected to boost its growth and earnings.
The last three analyst ratings were released from Morgan Stanley, JP Morgan and Truist Securities on June 10, 2024, May 16, 2024, and May 1, 2024. With an average price target of $33.67 between these three analysts, there’s an implied 18.63% upside for Enterprise Products Partners LP.
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This article This Dividend Aristocrat Is Offering A Yield Of 7.25% And Huge Upside Potential originally appeared on Benzinga.com
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