2024-02-06 05:19:00 ET
Oil and natural gas prices have a significant impact on corporate results in the energy industry. They can change significantly from quarter to quarter, which impacts the cash flows of companies sensitive to energy commodity prices.
However, not all energy stocks experience the full impact of commodity price volatility. Midstream companies like Enterprise Products Partners (NYSE: EPD) have business models that largely dampen the effect of that volatility on their cash flows. That was on full display in 2023 when the master limited partnership (MLP) set several financial and operational records despite more challenging conditions for energy sector companies broadly. That durability during turbulent periods has enabled the company to continue paying and increasing its distribution, which at current share prices yields a hefty 7.7%.
Last year was an unexpectedly volatile one for the energy industry. Oil and natural gas prices came down from their war-driven highs of 2022. Because of that, companies that produce and sell those commodities saw their earnings and cash flows decline.
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This Record-Breaking 7.7%-Yielding Dividend Stock Continues to Demonstrate Its Durability Despite Volatility