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Billionaire investors like Warren Buffet invested their wealth in dividend stocks, with portfolios consisting of stocks that offer a mix of stable income, high growth and safety.
One trending Dividend Aristocrat has all the hallmarks of a good income stock: Enterprise Products Partners LP (NYSE:EPD)
The American natural gas and crude oil pipeline company is a large-cap stock with a market capitalization of $61.72 billion as of June 2024. EPD is among the favorite stocks of institutional investors today, with the top hedge funds owning 25.55% of the shares.
Additionally, it currently offers a rolling yield of 7.25%, compared to the industry average of 4.38% and 1.3% for the S&P 500. EPD has paid consistently increasing quarterly dividends since 1998, with an annual growth rate of 3.90% in the past ten years. .
The stock has a high payout ratio of 79.53% compared to the industry average of 39.84%, but this should not be a problem as its strong financial position demonstrates the sustainability of the dividend. EPD has a recession-proof business model, with at least 60% of revenue coming from long-term, fixed-fee contracts.
As of June 2024, the company has a whopping $6.9 billion worth of projects under construction, including a natural gas processing plant. The new projects are expected to boost growth and profits.
The last three analyst ratings were released by 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 is an implied 18.63% positive side for Enterprise Products Partners LP.
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This article This Dividend Aristocrat Offers a 7.25% Yield and Huge Upside Potential originally appeared on Benzinga.com
