Latest news with #EnterpriseProductsPartners
Yahoo
15 hours ago
- Business
- Yahoo
This Top High-Yield Dividend Stock's Exports to China Could Take a Hit. Should Income Investors Be Worried?
Enterprise Products Partners needs to apply for a license to export ethane to China. The company isn't sure if it will be able to get a license or how much this will affect its business. While exports are a big part of its business, the MLP has very diversified operations and a top-notch financial profile. 10 stocks we like better than Enterprise Products Partners › Enterprise Products Partners (NYSE: EPD) has been an elite income-producing investment over the years. The master limited partnership (MLP) has raised its cash distribution to investors for 26 straight years (every year since its initial public offering). The energy midstream giant currently offers a yield of around 7%, which is several times higher than the S&P 500 (less than 1.5%). One factor fueling the MLP's lucrative and steadily growing payout is its leading energy export business. It operates several marine terminals along the U.S. Gulf Coast that export natural gas liquids, crude oil, petrochemicals, and refined products to global markets. China is a major destination for its ethane and butane exports. That's a potential problem now that the U.S. Department of Commerce is requiring companies to apply for a license to export to China. Here's a look at whether this policy shift could affect the company's ability to continue growing its high-yielding payout. The Commerce Department recently ordered companies to stop shipping goods, including ethane and butane, to China without a license. That will have a direct effect on Enterprise Products Partners. The company's marine terminal on the Houston ship channel loaded about 85,000 barrels of ethane per day last year for export to Chinese markets. That represented about 40% of the volumes from that facility, a big chunk of this country's ethane exports to China, which hit a record 227,000 barrels per day last year. The U.S. also exported a record 26,000 barrels of butane per day in 2024. The company is currently evaluating its procedures and internal controls. It said in a regulatory filing that it's not yet sure if it will be able to obtain a license to resume exports to China. One potential roadblock to a license is that an agency of the Commerce Department told the company that ethane and butane exports to China pose an unacceptable risk of military end-use by the country. However, that's not the typical use of ethane. Chinese petrochemical companies use the cheaper natural-gas-based product in place of oil-based naphtha as a feedstock to produce plastics and chemicals. It also has heating and cooking uses. Enterprise isn't sure how much this policy change will affect its operations and cash flow. A big unknown is whether the industry will be able to quickly find alternative markets and uses for the U.S. ethane and butane that were flowing to China. It's also not clear how much effect this will have on prices. China is a major energy consumer, making it a prime destination for U.S. hydrocarbons. U.S. exports satisfy 27% of the country's demand. While the Trump administration is currently curtailing exports to China, increasing U.S. energy export volumes to the country could help reduce the current trade imbalance. Enterprise's co-CEO Jim Teague said on the company's first-quarter conference call last month that the new administration's tariff plan "is causing nothing short of chaos around the world. Energy is not excluded." However, his company believes that the administration's policies have an end goal, which is "intended to promote U.S. energy, not just for the next four years, but for decades," Teague added. That's because U.S. energy is important to our economy, global markets, and our balance of trade. The new license requirements to export ethane to China could have some effect on Enterprise Products Partners' export business. However, the company has one of the most diversified midstream operations in the industry, which should help mute the impact. On top of that, it has one of the strongest financial profiles in the energy midstream sector. Because of that, the headwind shouldn't significantly affect the MLP's ability to continue paying a growing distribution in the near term. Meanwhile, the administration's policies should be net positives for the U.S. energy sector over the long term, especially for exports, since they're crucial to helping balance trade. Given all the positives, the company remains a rock-solid option for income-seeking investors to buy and hold for the long haul. Before you buy stock in Enterprise Products Partners, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Enterprise Products Partners wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Matt DiLallo has positions in Enterprise Products Partners. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy. This Top High-Yield Dividend Stock's Exports to China Could Take a Hit. Should Income Investors Be Worried? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 hours ago
- Business
- Yahoo
Is Enterprise Products Partners the Smartest Investment You Can Make Today?
Enterprise has been a model of consistency throughout the years. While conservative in nature, the company is not afraid to pursue growth. The stock is attractively valued at current levels. 10 stocks we like better than Enterprise Products Partners › You'll sometimes see investors pose the question online: "If you had $1 million and could only invest in one stock to hold for the next 10 years, what would it be?" On the surface, it's a way to crowdsource stock ideas, but it also brings in two key factors: time horizon and downside protection. After all, if you're locking in that kind of money for a decade, the last thing you want is to end up with less than you started. The truth of the matter is that most stocks ultimately underperform. A J.P. Morgan study found that between 1980 and 2020 40% of stocks in the Russell 3000, which consists of the 3,000 largest companies that trade in the U.S., experienced what it called a "catastrophic stock price loss," which it defined as a 70% price decline from which a stock never fully recovered. In addition, 40% of stocks during this period had absolute negative returns, and two-thirds underperformed the index. Against that backdrop, that is why I also answer the question with the same stock: Enterprise Products Partners (NYSE: EPD). In fact, it is the stock I've owned the longest, holding it since 2008. For those unfamiliar with Enterprise, it is a master limited partnership (MLP) that operates one of the largest integrated midstream systems in the U.S. It provides essential services, such as transportation, storage, and processing, to both producers and consumers of fossil fuel-based products, including crude oil, natural gas, natural gas liquids (NGLs), petrochemicals, and refined products. Its large integrated system gives it geographic, product, and market diversification. One of the most attractive things about Enterprise is its consistency. Midstream MLPs are pass-through entities that tend to carry attractive yields. Enterprise is no exception, with it currently having a forward yield of nearly 7%. Distributions are important to its stockholders, and the company has been able to increase its payout for 26 straight years, navigating several difficult energy and economic periods during that span. A big key to Enterprise's strong track record is that the company takes a conservative approach. Typically, about 85% of its cash flow comes from fee-based businesses, where swings in commodity prices or spreads have no impact on it. It also likes to attach take-or-pay or minimum volume commitment (MVC) provisions to its contracts, which means it gets paid whether or not its customers use its services. This helps protect its cash flow. Approximately 90% of its long-term contracts also have escalation provisions based on inflation. In addition, the company has a conservative balance sheet. Building pipelines and other midstream assets is capital-intensive, so midstream companies generally carry debt. Enterprise has low leverage for the industry, with it sitting at 3.1x at the end of last quarter. The company has done a great job of terming out its debt. Over 95% of it is fixed rate, with an average maturity of 18 years and an average interest rate of just 4.7%. In other words, it's locked in low-cost debt for the long haul, which is a valuable asset in today's higher interest rate environment. Enterprise also carries a high coverage ratio, which is an important measure regarding the safety of its payout. Last quarter, its coverage ratio was 1.7x its distributable cash flow (DCF), which is operating cash flow minus maintenance capital expenditure (capex). DCF is a common metric used with MLPs because the companies have the ability to ratchet their growth capex spending up or down. Its high coverage ratio lets it self-fund growth without having to issue equity or greatly increase its leverage. Despite its conservative nature, Enterprise is not afraid to pursue growth when it sees good opportunities. The company reduced its growth capex coming out of the pandemic, taking it to $1.6 billion as opportunities dried up. However, it plans to spend between $4 billion to 4.5 billion on growth projects this year, up from $3.9 billion in 2024, as demand for natural gas and NGLs continues to grow. The company is also very well positioned in the Permian Basin, which is the most prolific oil basin in the U.S. Enterprise currently has $7.6 billion of major capital projects under construction, of which $6 billion of these projects are set to come online this year. That sets the company up for solid growth in 2026 and beyond as these projects ramp up. Turning to valuation, the stock currently trades at an enterprise value (EV)-to-EBITDA multiple of 9.8, which is the most common metric used to value midstream companies. This is attractive from a historical perspective, as MLPs traded at an average EV/EBITDA multiple of 13.7x between 2011 and 2016. All in all, Enterprise is a solid, "sleep well at night" stock trading at an attractive valuation, and one of the smartest investments you can make today for the long term. It doesn't come without risks, as disruption in the economy and lower energy prices can impact volumes, but the company has a long track record of navigating these types of markets. So sit back and collect your ever-increasing distributions over the next decade. Before you buy stock in Enterprise Products Partners, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Enterprise Products Partners wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Geoffrey Seiler has positions in Enterprise Products Partners. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy. Is Enterprise Products Partners the Smartest Investment You Can Make Today? was originally published by The Motley Fool Sign in to access your portfolio
Globe and Mail
4 days ago
- Business
- Globe and Mail
The Smartest High-Yield Stocks to Buy With $100 Right Now
You can buy some smart high-yield investments with as little as $100 if you take your time and act selectively. Right now, United Parcel Service (NYSE: UPS), Brookfield Renewable Partners (NYSE: BEP), and Enterprise Products Partners (NYSE: EPD) all have 6% yields or higher, and share prices that are below $100. Here's a look at why each one might be a good fit for your portfolio right now. 1. United Parcel Service is a turnaround story United Parcel Service (or UPS) is one of the largest package delivery services in the world. During the coronavirus pandemic, investors bid up its shares because they extrapolated demand from people staying at home too far into the future. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » When the world opened back up, UPS fell short of Wall Street's lofty expectations. At that point, the company started to revamp its business, focusing on cost-cutting and increasing margins. When it finally looked like UPS had hit an inflection point, the company announced it was voluntarily reducing the business it was doing with Amazon, its largest customer. And shortly thereafter, the tariff upheaval started. The stock remains in Wall Street's doghouse even though it is making progress on its turnaround. In fact, the move away from Amazon is really a sign of strength, not weakness. UPS is basically trying to move away from a high-volume, low-margin customer. The 6.7% dividend yield is a sign that investors are worried about the future. But if you don't mind owning a turnaround stock, UPS looks like it has its business trending in the right direction again, even if the rebound is still a few years away. The lofty yield is good compensation for waiting. 2. Brookfield Renewable Partners has a growth runway Brookfield Renewable Partners owns a portfolio of renewable energy assets, including in the hydroelectric, solar, wind, battery, and nuclear categories. Its portfolio is spread across the globe, with operations in North America, South America, Europe, and Asia. It is as close to a one-stop shop in the renewable power sector as you can find on Wall Street. And it has a lofty 6.5% distribution yield. Part of the reason Brookfield's yield is so high is that investors have lost interest in clean energy stocks. That's an opportunity for those who think long term. In the U.S. market, wind, solar, and storage generation are expected to increase by 300% between 2020 and 2050, according to the National Electrical Manufacturers Association. That's all part of a massive increase in the demand for electricity that is taking place, with demand growth over the next 20 years expected to be six times larger than over the last 20 years. This is a global phenomenon, and Brookfield Renewable Partners is well-positioned to benefit all along the way. Meanwhile, you can collect a huge yield while the slow and steady shift from dirtier carbon energy sources toward cleaner alternatives plays out. 3. Enterprise Products Partners is an income tortoise Two things beyond the lofty 6.8% yield make this master limited partnership (MLP) stand out. The first is the more important one because it is the business behind the yield. Enterprise Products Partners owns midstream energy assets, like pipelines, that help to move oil and natural gas around the world. It charges fees for the use of these assets so it generates reliable cash flows through the entire energy business cycle. Add in an investment-grade balance sheet and distribution coverage by a 1.7 multiple in 2024, and this is a rock-solid income stock. A lot would have to go wrong for a distribution cut to be on the table. In fact, given the $7.6 billion capital investment plan in the works, it is far more likely that investors will see more distribution increases in the future. And that brings up the second reason to like Enterprise: It has increased its distribution annually for 26 consecutive years and counting. This midstream business is boring and reliable, and that's exactly why you'll likely find it to be a smart high-yield investment to add to your portfolio right now. Three high-yield options for your portfolio There is more than one way to add a high yield to your dividend portfolio. UPS is a turnaround story. Brookfield Renewable Partners is an option with a strong growth story behind it. And Enterprise is a boring high-yield business that even the most conservative of income investors could easily love. Should you invest $1,000 in United Parcel Service right now? Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Reuben Gregg Brewer has positions in Brookfield Renewable Partners. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Brookfield Renewable Partners, Enterprise Products Partners, and United Parcel Service. The Motley Fool has a disclosure policy.
Yahoo
5 days ago
- Business
- Yahoo
Enterprise Products says its China exports could fall due to license requirement
HOUSTON (Reuters) -Enterprise Products Partners on Thursday said its ethane and butane exports could be hurt by a U.S. Department of Commerce requirement that it apply for a license to export to China. The United States has ordered a broad swathe of companies to stop shipping goods, including ethane and butane, to China without a license and revoked licenses already granted to certain suppliers, Reuters reported on Wednesday. Enterprise, which owns and operates marine export terminals that handle ethane and butane, said in a regulatory filing it was evaluating its procedures and internal controls and could not determine if it will be able to obtain a license. Enterprise's marine export terminal on the Houston ship channel loaded about 213,000 barrels per day of ethane in 2024, of which about 85,000 BPD, or 40%, were exported to Chinese markets, Enterprise said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
2 No-Brainer High Yield Energy Stocks to Buy Right Now
Oil prices have been weak of late, but that won't derail Enterprise Products Partners or Enbridge. Enterprise and Enbridge operate in the midstream segment of the broader energy sector. Enbridge has a 6% yield while Enterprise is yielding 6.8%. 10 stocks we like better than Enterprise Products Partners › The average energy stock has a yield of around 3.6%. You can do way better than that with either Enbridge (NYSE: ENB) or Enterprise Products Partners (NYSE: EPD), which at this writing yield 6% and 6.8%, respectively. Those lofty yields, however, aren't a sign of risk. They are actually a no-brainer opportunity to add two reliable and growing income streams to your dividend portfolio. Here's what you need to know. The energy sector is known for its volatility, thanks to the commodity nature of the products it produces. At the beginning of the chain is oil and natural gas, which can and do see swift and dramatic price changes both up and down. At the end of the chain are chemicals and refined products, which use volatile oil and natural gas as inputs for products that themselves are often volatile commodities. These segments of the energy sector are known as the upstream and downstream, respectively. If you are going to invest in the energy sector the one thing you need to understand is that volatility is the norm. At least it is the norm for the upstream and the downstream. There's another industry segment known as the midstream that doesn't operate with the same dynamics. The midstream simply connects the upstream and downstream to each other and the rest of the world. Midstream companies generally charge fees for moving oil, natural gas, and the products into which they become. Midstream businesses like Enbridge and Enterprise Products Partners own energy infrastructure like pipelines, storage, processing, and transportation assets. The world simply can't get the energy it needs without these physical assets, so the fees midstream companies produce tend to be fairly consistent regardless of whether oil prices are high or low. Demand is the more important determinant of success for midstream operators. Whether you are looking at the midstream sector when energy prices are relatively weak like today or you are considering them when energy prices are high, the story doesn't materially change. The proof of that comes from the three-decade streak of annual dividend increases that back's Enbridge's lofty dividend yield. And the 26-year streak of distribution hikes that back's Enterprise's yield. Those yields are also backed by strong balance sheets. Enbridge's credit rating is BBB+. Enterprise's credit rating is one step higher on the scale at A-. There is plenty of financial leeway for both of these midstream players to support their disbursements even if they face some headwinds. Given the high yields, the income Enbridge and Enterprise generate is likely to make up the vast majority of most investors' total returns. That's probably not going to bother dividend-focused investors. But slow and steady growth in the income stream you collect is highly likely, too, given the regular fee increases and capital investments that these businesses make over time. All in, these are no-brainer, high-yield energy stocks if you are an income investor. Owning an oil producer can be a harrowing affair, with stock prices often rising and falling just as quickly and dramatically as oil prices. Most dividend investors will be better off with relatively boring midstream businesses. And in this niche of the energy sector, Enbridge and Enterprise stand out for their size, financial strength, and the consistency with which they have rewarded income investors. You should consider buying them right now if you want to add an energy stock to your portfolio. Before you buy stock in Enterprise Products Partners, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Enterprise Products Partners wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has positions in Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy. 2 No-Brainer High Yield Energy Stocks to Buy Right Now was originally published by The Motley Fool
