By comparison, the S&P 500 trades at roughly 18.8x forward earnings. Enterprise is also cheaper than the overall energy sector, which currently has a forward earnings multiple of 12x. The S&P 500’s Get Backed performance in 2023 has made its valuation relatively expensive by several metrics. In particular, the S&P 500 cyclically adjusted price-to-earnings (CAPE) ratio is in historically high territory.

We will present an Options strategy with both EPD and JEPI, using a Deep-ITM (Deep-In-The-Money) covered-call options. In this strategy, instead of outright ownership of the stock, you will use buy-write call options to earn as much as 10% to 15% income. In addition to an income boost of 50%, this will allow us to lower the cost of ownership and the downside risk. High-growth stocks tend to represent the technology, healthcare, and communications sectors.

  • 9 Wall Street equities research analysts have issued “buy,” “hold,” and “sell” ratings for Enterprise Products Partners in the last year.
  • And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
  • This represents a $2.00 dividend on an annualized basis and a dividend yield of 7.31%.
  • The consensus among Wall Street equities research analysts is that investors should “moderate buy” EPD shares.

In addition to the income boost, the buy-write option will allow you to lower the cost of ownership and downside risk in case the stocks go down immediately after you buy. However, this requires some extra work and some knowledge of trading Options. It’s possible that the dividend yield could become less attractive if you want to buy more shares. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The company has a vast energy infrastructure in the US that is irreplaceable to a large extent. Even then, it is not a growth company, so it should mostly appeal to income investors.

Enterprise Products Partners (EPD)

We’re growing existing relationships and developing new ones and new opportunities. Even with its nice gain, Enterprise Products Partners’ distribution yield of over 7.3% remains exceptionally attractive. Investors should be able to count on larger distributions going forward as well.

The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. The company also operates a deep water terminal for exporting and importing natural gas liquids, including 20 docks. The refining and processing segment operates 19 dual-purpose facilities, 9 NGL processing facilities, 2 propylene processors, 3 isomerization plants and 26 natural gas fractionalization facilities. Facilities are located in Colorado, Louisiana, Mississippi, New Mexico and Wyoming and Texas. Operations are also served by a fleet of 255 tanker trucks.

Enterprise Products Partners (EPD) Stock Forecast, Price & News

The consensus among Wall Street equities research analysts is that investors should “moderate buy” EPD shares. The company owns and operates more than 51,000 miles of pipeline, including natural gas, NGL, crude and propylene pipes. Is a diverse and fully integrated mid-stream energy company operating in North America. It was founded in 1968 by Dan Duncan and two partners as a wholesaler of natural gas liquids.

Historical Prices for Enterprise Products Partners L.P.

Enterprise Products Partners was ranked 89th on the 2022 Fortune 500 and is well known as a dividend grower. The company began paying a dividend in 1998 and has increased it yearly. Enterprise Zig zag indicator Products Partners  Investors can benefit from the dividend reinvestment plan by registering as an owner of record. I have more than 14 years of investment experience, and an MBA in Finance.

It’s possible that the demand for the company’s pipelines could decline in the coming years. This worry largely explains why Enterprise’s valuation isn’t higher. However, I don’t foresee the company running into major problems for a long time to come, if ever. Enterprise has delivered an average return on invested capital (ROIC) of 12% over the last 10 years. Its ROIC remained at 10% or higher even during the financial crisis in 2007 and 2008, the oil price collapse of 2014 through 2017, and the COVID-19 pandemic that began in 2020.

Ringing In the New Year With Income

U.S. hydrocarbons remain badly needed to support countries who live in energy poverty, and to support our closest friends or allies in Europe who are in energy crisis. Shares of energy pipeline companies were broadly higher Monday, in the aftermath of the ransomware attack on Colonial Pipeline, even as crude oil futures reversed earlier gains to trade lower. The biggest knock against Enterprise Products Partners is that climate change concerns are driving a shift from fossil fuels to renewable energy.

Stock Money Flow

Enterprise Products Partners declared a quarterly dividend on Monday, July 10th. Investors of record on Monday, July 31st will be given a dividend of $0.50 per share on Monday, August 14th. This represents a $2.00 dividend on an annualized basis and a dividend yield of 7.31%. The ex-dividend date of this dividend is Friday, July 28th. This is an increase from the stock’s previous quarterly dividend of $0.49. Gen Alpha has teamed up with Hoya Capital to launch the premier income-focused investing service on Seeking Alpha.

If you do not need the income today, you could reinvest the entire income and use the power of compounding to achieve great long-term results. The latter part of the article is for more active and aggressive investors who also want an income yield north of 10%. We have demonstrated the use of ‘Deep In-The-Money’ buy-write call options. This strategy particularly suits these two securities and generates income ranging from 10% to 15% while protecting against downside risk. We will also present an alternative choice for those who want an income yield even greater than 8%. With this method, instead of outright ownership of the stock, you could use buy-write call options to earn as much as 10% to 15% income.

The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style. Enterprise Products Partners’ stock was trading at $24.12 on January 1st, 2023. Since then, EPD stock has increased by 13.5% and is now trading at $27.37.

An industry with a larger percentage of Zacks Rank #1’s and #2’s will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4’s and #5’s. The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) invest in biotech Industries based on their average Zacks Rank. 83 employees have rated Enterprise Products Partners Chief Executive Officer Jim Teague on Glassdoor.com. Jim Teague has an approval rating of 87% among the company’s employees.

It should outperform the S&P500 in a bear market, but in a bull market, it is likely to underperform. But we must remember that we are investing in income security, not growth security. If the goal is to achieve high growth, then JEPI is not the right security. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer.

JEPI is an interesting and highly popular ETF (Exchange Traded Fund) with retirees and income investors. While it offers many attractive features to income investors, just like any other security, it also has its shortcomings. Enter your email address below to receive our daily newsletter that contains dividend stock ideas, ex-dividend stocks, and the latest dividend investing news. Enter your email address below to receive the DividendStocks.com newsletter, a daily email that contains dividend stock ideas, ex-dividend stocks, and the latest dividend investing news. Style is an investment factor that has a meaningful impact on investment risk and returns.