EPD - 7%-Yielding Enterprise Products Partners - Bulls Haven't Seen Anything Yet

2024-07-21 08:08:40 ET

Summary

• Dividend stocks have struggled in recent years, underperforming the S&P 500. Factors like AI investments and high-yield bonds have shifted investor focus away from them.
• EPD stands out with consistent distribution growth, strong financials, and strategic assets. Its shift from capital projects to cash returns makes it attractive for investors.
• Potential rate cuts could drive capital back to high-yield alternatives. EPD, with its stability and income focus, is well-positioned to benefit from this shift.

Introduction

Historically, dividend stocks have been a great place to be, mainly because of their ability to distribute consistently rising dividends, making them stand out in a world of companies that struggle to do the same.

Unfortunately, the past four years have been tough on dividend stocks. Using the Vanguard High Dividend Yield ETF ( VYM ) as a proxy for dividend stocks, we see the ETF has underperformed the S&P 500 since 2018/2019....

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