This 10.3%-Yielding Energy Stock Is Taking a Step Back to Make Its Dividend Even Safer
This year's oil market downturn has claimed another victim. The latest casualty is the Midland-to-ECHO 4 crude oil pipeline (M2E4), which Enterprise Products Partners (NYSE: EPD) has canceled. While the decision will cost the master limited partnership some money, it has some notable longer-term financial benefits, namely that it will save $800 million in capital costs over the next couple of years. Those savings will put the energy company's high-yielding payout -- which is up to 10.3% at the moment -- on an even firmer long-term foundation.
Enterprise initially sanctioned the M2E4 project last October after securing enough long-term customer agreements to justify the investment. It was planning to build a 450,000 barrel a day pipeline from an oil storage facility in the Permian Basin to an even larger one along the U.S. Gulf Coast, which connected to several refineries in Texas and a network of marine export terminals. The company estimated that it would cost more than $800 million to build the pipeline, which it expected to finish by the first half of next year.
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Source Fool.com
