Top Dividend Stock: Enterprise Products Delivers Ultrahot 7.36% Yield

Dividend stock leader Enterprise Products Partners (EPD) is back in focus after management hiked the payout once again, raising the quarterly dividend to 49 cents per share. This brings the annualized yield to an ultrahot 7.36%, well above the 1.5% average of the S&P 500.

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IBD’s Income Investor has highlighted many oil and gas pipeline stocks in the last year. Stable cash flows and a buoyant energy sector have led to impressive results and mouthwatering dividend yields.

Houston-based Enterprise Products operates over 50,000 miles of crude oil and natural gas pipelines. It also maintains natural gas storage facilities and processing sites.

Dividend Stock Hikes Payout For 75th Time

Enterprise Products investors expect steady dividend hikes, so the latest uptick comes as no surprise. In fact, this dividend stock has increased distributions every year since the company was formed 25-years ago.

Most high-yield companies raise payouts just enough to maintain their dividend aristocrat status. But Enterprise Products aggressively raises distributions multiple times each year, with an astounding 75 hikes over the last quarter century.

Enterprise Products has also posted solid growth, supporting these aggressive payouts.

Fourth-quarter results on Feb. 1 showed continued strength, with a profit of 65 cents per share beating analyst estimates by 2 cents. Revenue for this dividend stock came up short, at $13.65 billion, which still marked impressive 20.1% year-over-year growth.

Whole net income of $5.5 billion in fiscal 2022 compared favorably to 2021’s $4.6 billion while earnings of $2.54 per shares marked a modest increase over $2.20. Slow-but-steady growth is projected to continue, with EPS forecast to rise to $2.56 and $2.64 in 2023 and 2024.

Enterprise Products kicked off 2023 by refinancing some debt through the issuance of $1.75 billion in 3- and 10-year notes. Company debt remains investment grade, with a BBB+ rating from S&P Global.

Shares of Enterprise Products have been forming a 26-week consolidation base with a 27.46 buy point. EPD stock has held support at its 200-day line for the last month and is trading firmly above its 50-day moving average.

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