Enterprise (EPD) Hikes Dividend, Banks On Transportation

 | Jan 14, 2018 10:53PM ET

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.