Enterprise Products Partners LP. (NYSE:EPD): Ex-Dividend Is In 3 Days, Should You Buy?

Important news for shareholders and potential investors in Enterprise Products Partners LP. (NYSE:EPD): The dividend payment of $0.43 per share will be distributed into shareholder on 08 May 2018, and the stock will begin trading ex-dividend at an earlier date, 27 April 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Enterprise Products Partners’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Enterprise Products Partners

5 questions to ask before buying a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

  • Is its annual yield among the top 25% of dividend-paying companies?
  • Does it consistently pay out dividends without missing a payment of significantly cutting payout?
  • Has dividend per share risen in the past couple of years?
  • Does earnings amply cover its dividend payments?
  • Will the company be able to keep paying dividend based on the future earnings growth?

NYSE:EPD Historical Dividend Yield Apr 23rd 18
NYSE:EPD Historical Dividend Yield Apr 23rd 18

How does Enterprise Products Partners fare?

Enterprise Products Partners has a trailing twelve-month payout ratio of 129.66%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a lower payout ratio of 105.06%, leading to a dividend yield of around 6.87%. However, EPS should increase to $1.52, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of EPD it has increased its DPS from $1.01 to $1.71 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. In terms of its peers, Enterprise Products Partners produces a yield of 6.43%, which is high for Oil and Gas stocks.

Next Steps:

Considering the dividend attributes we analyzed above, Enterprise Products Partners is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three key factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for EPD’s future growth? Take a look at our free research report of analyst consensus for EPD’s outlook.
  2. Valuation: What is EPD worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether EPD is currently mispriced by the market.
  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.