EPD - 2 No-Brainer High-Yield Stocks to Buy With $500 Right Now
2024-07-13 18:25:00 ET
Do you have some money in your pocket, say $500 (or more), just waiting to be put to work in the market? If you are an income investor that may be a problem, since the raging bull market has left the average stock yield at painfully low levels. The S&P 500 index's yield is a miserly 1.3%! Don't fret; there are still plenty of attractive yield options out there, and this pair of high yielders rises to the top, with yields of 4.8% and 7%, respectively.
The energy sector is not exactly known for being a safe haven for investors, given that oil and natural gas prices have a long history of volatility. But not all energy companies are created equal. The upstream (oil producers) and the downstream (chemicals and refining) are, indeed, prone to wild swings in financial performance. But the midstream ( pipelines , storage, processing, and transportation) is not. That's the niche where Enterprise Products Partners (NYSE: EPD) and its lofty 7% distribution yield hail from.
The key here is that Enterprise is a toll taker. It charges fees for the use of its vital energy infrastructure assets, which leads to fairly reliable cash flows in good energy markets and bad ones. Oil and natural gas are vital to the world economy, and even when energy prices are low there's still solid demand. This is why Enterprise has been able to increase its distribution for 25 consecutive years, proving that it is a reliable income stock.
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2 No-Brainer High-Yield Stocks to Buy With $500 Right Now