Uncovering Two High-Dividend Stocks with Impressive Yields, Perfect for Long-Term Investment Spanning Decade
In the hunt for reliable income stocks that can endure for a decade or more, the energy sector can be a challenging playground due to its notorious volatility. But fear not, there are two standout choices that should delight conservative dividend investors—Enterprise Products Partners (EPD) and Enbridge (ENB).
From a bird's-eye perspective, the energy sector involves the extraction of raw oil and natural gas from the earth and their subsequent transportation to processing facilities. The upstream companies undertake the task of mining these resources, while the downstream companies produce valuable products from them.
Both upstream and downstream sectors are driven by commodity prices, with energy volatility being the norm for the former and a double whammy for the latter (additionally dealing with commoditized products). The midstream sector, on the other hand, offers a refreshing shift. Midstream companies manage infrastructure, including pipelines, storage, transportation, and processing assets. Incredibly, these firms mainly generate income through asset usage fees, making their cash flow less reliant on energy prices.
For investors seeking a dependable income stream, midstream is the place to kick-start their search in the energy sector.
Enterprise and Enbridge, two titans of the industry, boast appealing yields to captivate dividend investors. Enterprise Products Partners, a master limited partnership (MLP), boasts a distribution yield of 6.3%, while Enbridge sees a 6% dividend yield in Canadian currency. In comparison, the average energy stock yields 3.3%, and the S&P 500 yields a mere 1.2%.
Moreover, these two behemoths prove their mettle in consistency. Over the past 27 years, Enterprise has steadily increased its distribution yearly, while Enbridge has honored its dividend payouts for an impressive 30 years. Such a track record can lull even the most jittery investor to sleep at night, with the peace of mind that their income will continue decade upon decade.
Both organizations boast substantial and high-quality portfolios and are financially robust, making it easy to anticipate those income checks to keep rolling in.
While Enterprise leans towards oil and natural gas infrastructure, Enbridge's portfolio embraces natural gas utilities and clean energy investments. Enbridge's approach may appeal to investors aspiring to hedge energy bets against the clean energy revolution, yet it may be a detractor for those seeking purity in their investments.
Ultimately, regardless of whether you pick one, both, or even combine them, you've made an astute decision in your quest for a substantial and dependable income stream. Enterprise and Enbridge are two of the most dependable dividend-paying energy companies in the market today—albeit a tad boring, but that very quality is what draws in those determined to invest and hold for years on end.
Investing in Enterprise Products Partners (EPD) or Enbridge (ENB) can provide a stable income stream for conservative dividend investors, given their high yields and consistent dividend payouts for over two decades. These midstream companies generate income predominantly through asset usage fees, making their cash flow less dependent on energy prices.
