Should You Buy This 7.5%-Yielding Dividend Stock?
Midstream master limited partnership (MLP) Enterprise Products Partners (NYSE: EPD) has a very attractive distribution yield of 7.5% today. That's the type of number that would attract income investors, but a look at history suggests that the high yield here shouldn't limit this MLP to dividend types. Here's why.
Enterprise Products Partners is one of the largest owners of energy infrastructure in North America. It charges customers fees for the use of its pipelines, storage, processing, and transportation assets. The toll-taker nature of its business provides consistent cash flows to support the MLP's sizable shareholder distributions. High yields are fairly common in the midstream space.
MLPs are a bit more complicated to own than traditional companies tax-wise, requiring unitholders to deal with a K-1 form come April 15. However, they can also generate tax-advantaged income thanks to the pass-through nature of the business structure. All in, if you are willing to do a little more legwork around tax time, Enterprise is an attractive income stock. Highlighting this fact is the 24 years of annual distribution increases it has provided to unitholders.
Source Fool.com
MLP SE Stock
Our community is currently high on MLP SE with 3 Buy predictions and 0 Sell predictions.
As a result the target price of 10 € shows a very positive potential of 73.01% compared to the current price of 5.78 € for MLP SE.
