Dividend Stocks Double Average Annual Returns of Non-Payers Over 51 Years
Written by Emily J. Thompson, Senior Investment Analyst
Source: NASDAQ.COM
- Dividend Stock Performance: According to Hartford Funds, over the past 51 years, dividend stocks have achieved an average annual return of 9.2%, compared to just 4.31% for non-payers, highlighting the long-term advantages of dividend investing.
- Safe Dividend Choices: Among high-yield stocks, Sirius XM boasts an annual yield of nearly 5.3%, benefiting from its unique position as the only satellite radio provider in the U.S., which grants it strong pricing power and stable subscription revenue for shareholders.
- Stability in Energy Stocks: Enterprise Products Partners has increased its dividend for 27 consecutive years, with a current yield nearing 7%, and its long-term fixed-fee contracts ensure highly predictable cash flow, mitigating risks from market volatility.
- Growth Potential in Healthcare Stocks: Pfizer's dividend yield is close to 7%, and despite a decline in share price due to falling COVID-19 vaccine sales, its acquisition of Seagen significantly expands its oncology pipeline, expected to enhance profitability in the coming years.
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Analyst Views on EPD
Wall Street analysts forecast EPD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for EPD is 35.17 USD with a low forecast of 33.00 USD and a high forecast of 38.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
6 Buy
5 Hold
1 Sell
Moderate Buy
Current: 33.460
Low
33.00
Averages
35.17
High
38.00
Current: 33.460
Low
33.00
Averages
35.17
High
38.00
About EPD
Enterprise Products Partners L.P. is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products and petrochemicals. Its NGL Pipelines & Services segment includes natural gas processing and related NGL marketing activities, NGL pipelines, NGL fractionation facilities, NGL and related product storage facilities and NGL marine terminals. Its Crude Oil Pipelines & Services segment includes crude oil pipelines, crude oil storage and marine terminals and related crude oil marketing activities. Its Natural Gas Pipelines & Services segment includes natural gas pipeline systems that provide for the gathering, treating and transportation of natural gas. Its Petrochemical & Refined Products Services segment includes propylene production facilities; butane isomerization complex and related deisobutanizer (DIB) operations; octane enhancement, iBDH and HPIB production facilities; refined products pipelines, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
MLPs Offer High Yields with Tax Simplification
- Attractive High Yields: Currently, Enterprise Products Partners and Energy Transfer yield 6.7% and 7.4%, respectively, significantly higher than the S&P 500's 1.1% dividend yield, drawing in investors seeking passive income.
- Tax Simplification Advantage: The Alerian MLP ETF offers an 8% distribution yield and simplifies tax reporting by processing K-1 forms and issuing a single 1099 to investors, making it suitable for those wishing to hold in tax-deferred accounts.
- Diversified Portfolio: The ETF tracks the Alerian MLP Infrastructure Index, which includes various energy infrastructure MLPs, ensuring broad diversification across sectors like petroleum pipeline transportation, thereby reducing single investment risk.
- Stable Cash Flow Support: Energy Transfer and Enterprise Products Partners account for 12.5% and 11.7% of the ETF's assets, respectively, both relying on stable fee-based income to ensure the sustainability of their high-yield distributions.
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Analysis of High-Yield Investment Options
- Enterprise Products Partners' Stable Yield: Enterprise Products Partners (EPD) offers a 6.5% dividend yield and boasts a 27-year streak of annual distribution increases, demonstrating its stability in the energy infrastructure sector despite the volatility typically associated with energy markets, thus providing reliable cash flow for investors.
- Realty Income's Monthly Dividend Advantage: Realty Income (O), the largest net lease REIT, showcases a 5.3% dividend yield and a 30-year history of annual dividend increases, highlighting its financing advantages in capital markets, which attracts conservative investors seeking steady income.
- Brookfield Renewable Partners' Clean Investment: Brookfield Renewable Partners (BEP) presents a 5.2% dividend yield and encompasses various clean energy technologies such as hydroelectric, solar, and wind, with a projected 6% compound annual growth rate in distributions from 2015 to 2025, making it an appealing option for investors interested in clean energy.
- High-Yield Choices in a Low-Yield Environment: In a market where the S&P 500 offers only a 1.1% dividend yield, Enterprise, Realty Income, and Brookfield Renewable Partners provide diverse high-yield investment options for risk-averse passive income investors, underscoring the importance of selective investing.
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