Enterprise Products Partners vs. Energy Transfer: Who Will Win the High-Yield Pipeline MLP Race?

Dividend investors are often drawn in by a huge yield. That makes sense in some ways, but it can lead yield-hungry investors to take on more risk than perhaps they should.

A good example today is Energy Transfer (NYSE: ET), which has a huge 9.6% distribution yield as compared to Enterprise Products Partners (NYSE: EPD), which offers a lower 7.5% yield. If you are trying to live off the income your portfolio generates, history suggests the lower-yielding master limited partnership (MLP) will be a much safer choice.

It's pretty obvious that collecting the 9.6% distribution yield from Energy Transfer will lead to more income than the 7.5% yield from Enterprise. And to be fair, Energy Transfer produced distributable cash flow of around $2 billion in the first quarter of 2023. While that was down 3% year over year, it was more than enough to cover its distribution.

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Source Fool.com