Enterprise (EPD) Hikes Dividend, Banks On Transportation

Enterprise Products Partners L.P.’s (NYSE:EPD) board of directors has announced an increase of 3.7% on an annual basis in its quarterly cash distribution.

A dividend of 425 cents per common unit or $1.70 per unit on an annualized basis will be paid to the limited partners in the fourth quarter. The dividend is up 0.6% from dividend of 425 cents paid in the preceding quarter.

The quarterly distribution will be paid on Feb 7, 2018, to unitholders of record as of the close of business on Jan 31, 2018. Since Enterprise’s initial public offering in 1998, this increase marks the 54th consecutive quarterly increase and the 63rd overall distribution increase.

The current dividend yield is 5.85%, lower than the industry’s yield of 6.20% but higher than the S&P 500 index’s 1.63%.

Enterprise has an extensive network of pipeline, spread over almost 50,000 miles. The pipelines carry natural gas, NGL, crude oil and refined products. Notably, the partnership’s midstream properties are linked to all prospective shale plays in the United States, rich in natural gas and oil. These extensive networks of natural gas pipelines provide stable fee-based revenues.

Recently, it was witnessed that an increase in oil exports from the United States into the Asian markets can put pressure on the world markets as the supplies from OPEC may eventually be replaced with that of the United States. These are expected to benefit pipeline companies like Enterprise as transportation activities increase.

Price Performance

Enterprise Products Partners’ shares have gained 1.7% against the industry’s decline of 4% in the last three months.

Zacks Rank & Key Picks

Enterprise carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include Statoil (OL:STL) ASA (NYSE:STO) , Pioneer Natural Resources Co. (NYSE:PXD) , and Denbury Resources Inc. (NYSE:DNR) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Statoil, based in Norway, is a major international integrated oil and gas company. It saw an average negative earnings surprise of 8.44% in the last four quarters.

Headquartered in Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 67.62% in the last four quarters.

Headquartered in Plano, TX, Denbury Resources, is engaged in the exploration, production and development of natural gas properties. The company delivered an average positive earnings surprise of 125.00% in the last four quarters.

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