Published Thu, 30 Jul 2020 19:15:55 -0400 on Seeking Alpha
Seeking AlphaDividend Ideas | Basic MaterialsEnterprise Products Partners: A Conservative Way To Make A 10%-Plus YieldJul. 30, 2020 7:15 PM ET|| About: Enterprise Products Partners L.P. (EPD), Includes: ENB, KMIby: Darren McCammonDarren McCammon Cash Flow KingdomThe Investment Community where "Cash Flow is King"SummaryWith Kinder Morgan, Enbridge, and Enterprise Products Partners now having reported, the sector appears to be surviving COVID-19 much better than many feared.
Shut-ins across all basins are being turned back on, but the Permian, in particular, stands out as rebounding very quickly.
Enterprise Products Partners is a conservatively run midstream firm that benefits. It also offers a tax-advantaged dividend yield over 10%, which should grow at least at rate of inflation.
Ask yourself, in today's troubled environment, isn't that good enough?
Cash Flow Kingdom is currently overweight midstream, especially natural gas-centric midstream common and preferred.
The reasons are multiple:
Natural gas demand is not going down significantly. COVID-19 has little effect on the main sources of demand: electricity production, heating, and cooking. It only has some effect on industrial demand and export. Many midstream firms have switched from MLP to C-corp. This allows greater access to capital, fosters better governance, and most importantly, encourages firms to live within their means. Legal challenges by environmental groups have created havoc and significantly increased costs and risks related to new pipeline building. Keystone became a never-ending saga. Trans Mountain became so stymied Kinder Morgan (KMI) sold it to the Canadian government. Enbridge (ENB) has said it will only build a Canadian pipeline if it is wholly contained in energy-friendly Alberta. The Dakota Access pipeline 'DAPL' was almost shut down after receiving all approvals, having been built and operated for 3 years. The Atlantic Coast pipeline was cancelled. Equitrans... Read more
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