Why You Won't Want to Overlook the Progress of This Ultra-High-Yielding Dividend Stock
Crestwood Equity Partners (NYSE: CEQP) offers passive-income investors an enticing yield. The payout of the master limited partnership (MLP) currently clocks in at 8.7%, more than double the energy sector's average and over four times the S&P 500.
While high-yielding payouts are usually higher risk, Crestwood Equity Partners is different. The midstream energy company has taken several steps this year to enhance the long-term sustainability of its big-time distribution. Because of that, passive-income seekers will want to take a closer look at Crestwood's payout.
Crestwood Equity Partners recently showcased its ability to sustain its payout when it reported its third-quarter results. The MLP generated $131 million of distributable cash flow during the period, a 53% increase from the prior year. That provided it with enough money to cover its distribution (it paid $68.5 million in the period) by a comfortable 1.9 times, even after factoring in a 5% increase earlier this year. It used that retained cash to fully fund its expansion projects ($59.1 million during the quarter). That left Crestwood with $3.4 million of free cash flow during the period.
Source Fool.com
