Strategies to Enhance Tax Efficiency for Investors
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 15 2026
0mins
Source: CNBC
- Tax Efficiency Improvement: According to Bank of America, a tax-aware portfolio achieved a 7.4% annualized return over 30 years, compared to 5.9% for a tax-insensitive portfolio, highlighting the significant impact of tax management on long-term returns.
- Buybacks Over Dividends: Investors should prefer stock buybacks over dividends since buybacks are not taxable events, while dividends incur taxes ranging from 0% to 20%, although companies may reduce buybacks due to other capital commitments.
- Municipal Bond Advantages: Municipal bonds provide federal tax-exempt income, and residents of the issuing state can enjoy additional state and local tax exemptions, with tax-equivalent yields potentially exceeding Treasuries by 70 basis points, making them suitable for high-tax investors.
- Direct MLP Ownership: Master limited partnerships (MLPs) offer attractive yields but should be owned directly to avoid extra tax burdens, as distributions are treated as a return of capital, increasing investors' cost basis; recommended high-rated MLPs include DT Midstream, Energy Transfer, and Enterprise Products Partners.
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Analyst Views on EPD
Wall Street analysts forecast EPD stock price to fall
12 Analyst Rating
6 Buy
5 Hold
1 Sell
Moderate Buy
Current: 37.250
Low
33.00
Averages
35.17
High
38.00
Current: 37.250
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.
AbbVie, Chevron, and Enterprise Products' Dividend Prospects
- AbbVie's Dividend King Status: AbbVie has increased its dividend for 54 consecutive years, boasting a dividend yield exceeding 3%, with seven of its twelve blockbuster drugs generating over $2 billion annually, indicating strong growth potential that is likely to drive stock price appreciation.
- Chevron's Stable Returns: Chevron has raised its dividend for 39 years, currently yielding 3.8%, and can sustain dividends and capital expenditures even if oil prices fall below $50 per barrel, showcasing robust financial resilience and attractiveness to investors.
- Enterprise Products' High Yield: Enterprise Products Partners offers a distribution yield of 5.8% and has increased its distribution for 27 consecutive years, with a strong balance sheet and 90% of long-term contracts insulated from inflation, positioning it favorably in the energy market.
- Market Volatility and Investment Opportunities: While the likelihood of rate cuts remains low due to rising inflation and a strong job market, this dynamic makes stable income investments more appealing, with high-dividend stocks like AbbVie, Chevron, and Enterprise Products becoming top picks for investors.
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- Chevron's Stable Returns: Chevron has increased its dividend for 39 consecutive years, with a current yield of 3.8%, and has repurchased shares in 18 of the last 22 years, demonstrating a strong commitment to shareholder returns, with expected annual EPS growth of over 10%.
- High Yield from Enterprise Products: Enterprise Products Partners offers a distribution yield of 5.8% and has increased distributions for 27 consecutive years, supported by a strong balance sheet and high credit rating, indicating continued growth potential.
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- Energy Transfer Company: Energy Transfer (ET) reported a 31.1% year-over-year revenue increase to $27.8 billion in Q1, with adjusted EBITDA rising 20.5% to $4.9 billion, indicating strong performance in its stable transportation business, complemented by an attractive 7.2% dividend yield, far exceeding the S&P 500's 1.1%.
- Enterprise Products Partners: Enterprise Products Partners (EPD) experienced a 6.7% year-over-year revenue decline to $14.4 billion, yet its adjusted EBITDA grew by 10%, demonstrating resilience amid market fluctuations, while offering a 5.9% dividend yield that appeals to long-term investors.
- Investment Outlook: Both companies are investing in pipeline and processing capacity expansions, expected to enhance future revenue and profitability, and they both have a history of stable dividend payments, increasing their attractiveness as long-term investments.
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Investment Opportunities in the Energy Sector
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- Energy Transfer Performance: Energy Transfer (NYSE: ET) reported a 31.1% year-over-year revenue increase to $27.8 billion in Q1, with adjusted EBITDA rising 20.5% to $4.9 billion, indicating a robust business model in energy transportation and storage, although its stock price appreciation lagged behind the overall energy sector.
- Enterprise Products Partners Dynamics: Enterprise Products Partners (NYSE: EPD) experienced a 6.7% year-over-year revenue decline to $14.4 billion, yet adjusted EBITDA grew by 10%, showcasing resilience in a cyclical market, while the company continues to invest in processing capacity and pipeline expansion projects expected to enhance future revenue and profitability.
- Dividend Attractiveness: Energy Transfer offers a dividend yield of 7.2%, significantly higher than the S&P 500's 1.1%, while Enterprise Products Partners boasts a 5.9% yield, demonstrating both companies' strong commitment to returning capital to shareholders, making them appealing to long-term investors.
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Top Dividend Stocks Thrive Amid Inflation
- Dividend Stock Advantage: In an environment of high inflation and rising interest rates, top-tier dividend stocks serve as a safe haven for investors due to their robust business models and consistently growing dividends, particularly those that can compete with bond yields.
- Coca-Cola's Performance: The Coca-Cola Company has increased its dividends for 64 consecutive years, currently boasting a 2.6% dividend yield, and outperformed the S&P 500 during the Fed's rate hikes in 2022, demonstrating strong pricing power and market adaptability.
- Enterprise Products Partners' Stability: Enterprise Products Partners excelled in 2022 with a dividend yield of 5.9%, benefiting from approximately 90% of its long-term contracts containing price escalation clauses, which help maintain profitability in inflationary conditions.
- Dominion Energy's Growth Potential: Although Dominion Energy's stock price fell in 2022, its outlook remains positive due to rapid data center construction and an acquisition deal with NextEra Energy, with a dividend yield of 3.93%, indicating strong future prospects.
See More
Top Dividend Stocks Thrive in Current Market Conditions
- Coca-Cola's Dividend Advantage: The Coca-Cola Company has increased its dividend for 64 consecutive years, with a current yield of 2.6%, providing stable cash flow in a high-inflation environment, thereby boosting investor confidence.
- Enterprise Products Partners' Inflation Resilience: Enterprise Products Partners has approximately 90% of its long-term contracts with price escalation clauses, has increased its distribution for 27 consecutive years, and currently offers a distribution yield of about 5.9%, enabling it to achieve double-digit total returns under inflationary pressures.
- Dominion Energy's Market Potential: Despite a poor stock performance in 2022, Dominion Energy benefits from rapid data center construction, and its acquisition price is nearly 15% above its current stock price, indicating significant market value potential.
- Dividend Stocks' Market Performance: During the Fed's rate hikes in 2022, top-tier dividend stocks outperformed the S&P 500, demonstrating their appeal as safe havens, particularly in an environment of rising interest rates and persistent inflation.
See More
AbbVie, Chevron, and Enterprise Products' Dividend Prospects
- AbbVie's Dividend King Status: AbbVie has increased its dividend for 54 consecutive years, boasting a dividend yield exceeding 3%, with seven of its twelve blockbuster drugs generating over $2 billion annually, indicating strong growth potential that is likely to drive stock price appreciation.
- Chevron's Stable Returns: Chevron has raised its dividend for 39 years, currently yielding 3.8%, and can sustain dividends and capital expenditures even if oil prices fall below $50 per barrel, showcasing robust financial resilience and attractiveness to investors.
- Enterprise Products' High Yield: Enterprise Products Partners offers a distribution yield of 5.8% and has increased its distribution for 27 consecutive years, with a strong balance sheet and 90% of long-term contracts insulated from inflation, positioning it favorably in the energy market.
- Market Volatility and Investment Opportunities: While the likelihood of rate cuts remains low due to rising inflation and a strong job market, this dynamic makes stable income investments more appealing, with high-dividend stocks like AbbVie, Chevron, and Enterprise Products becoming top picks for investors.
See More
Top High-Yield Dividend Stocks: AbbVie, Chevron, Enterprise
- AbbVie's Strong Growth: AbbVie markets 12 blockbuster drugs, with 7 generating over $2 billion in annual sales, and boasts a 54-year streak of dividend increases, currently yielding 3%, positioning it strongly in the pharmaceutical sector.
- Chevron's Stable Returns: Chevron has increased its dividend for 39 consecutive years, with a current yield of 3.8%, and has repurchased shares in 18 of the last 22 years, demonstrating a strong commitment to shareholder returns, with expected annual EPS growth of over 10%.
- High Yield from Enterprise Products: Enterprise Products Partners offers a distribution yield of 5.8% and has increased distributions for 27 consecutive years, supported by a strong balance sheet and high credit rating, indicating continued growth potential.
- Market Environment Impact: With rising inflation and a strong job market, increased market volatility may occur, yet high-yield stocks like AbbVie, Chevron, and Enterprise Products are likely to attract income-seeking investors, potentially driving their stock prices higher.
See More
Energy Stocks Surge, Attracting Investors Amid Rising Commodity Prices
- Energy Sector Performance: As of June 8, the S&P 500 Energy sector surged 40% due to rising crude oil and natural gas prices, significantly outperforming the 22.9% increase in the S&P 500 ex-Energy, highlighting the sector's robust recovery and investment appeal.
- Energy Transfer Company: Energy Transfer (ET) reported a 31.1% year-over-year revenue increase to $27.8 billion in Q1, with adjusted EBITDA rising 20.5% to $4.9 billion, indicating strong performance in its stable transportation business, complemented by an attractive 7.2% dividend yield, far exceeding the S&P 500's 1.1%.
- Enterprise Products Partners: Enterprise Products Partners (EPD) experienced a 6.7% year-over-year revenue decline to $14.4 billion, yet its adjusted EBITDA grew by 10%, demonstrating resilience amid market fluctuations, while offering a 5.9% dividend yield that appeals to long-term investors.
- Investment Outlook: Both companies are investing in pipeline and processing capacity expansions, expected to enhance future revenue and profitability, and they both have a history of stable dividend payments, increasing their attractiveness as long-term investments.
See More
Investment Opportunities in the Energy Sector
- Rising Energy Prices: The energy sector has performed strongly in 2023, with the S&P 500 Energy sector gaining 40% through June 8, significantly outpacing the 22.9% increase in the S&P 500 ex-Energy, reflecting investor confidence in the sector amid rising crude oil and natural gas prices.
- Energy Transfer Performance: Energy Transfer (NYSE: ET) reported a 31.1% year-over-year revenue increase to $27.8 billion in Q1, with adjusted EBITDA rising 20.5% to $4.9 billion, indicating a robust business model in energy transportation and storage, although its stock price appreciation lagged behind the overall energy sector.
- Enterprise Products Partners Dynamics: Enterprise Products Partners (NYSE: EPD) experienced a 6.7% year-over-year revenue decline to $14.4 billion, yet adjusted EBITDA grew by 10%, showcasing resilience in a cyclical market, while the company continues to invest in processing capacity and pipeline expansion projects expected to enhance future revenue and profitability.
- Dividend Attractiveness: Energy Transfer offers a dividend yield of 7.2%, significantly higher than the S&P 500's 1.1%, while Enterprise Products Partners boasts a 5.9% yield, demonstrating both companies' strong commitment to returning capital to shareholders, making them appealing to long-term investors.
See More
Top Dividend Stocks Thrive Amid Inflation
- Dividend Stock Advantage: In an environment of high inflation and rising interest rates, top-tier dividend stocks serve as a safe haven for investors due to their robust business models and consistently growing dividends, particularly those that can compete with bond yields.
- Coca-Cola's Performance: The Coca-Cola Company has increased its dividends for 64 consecutive years, currently boasting a 2.6% dividend yield, and outperformed the S&P 500 during the Fed's rate hikes in 2022, demonstrating strong pricing power and market adaptability.
- Enterprise Products Partners' Stability: Enterprise Products Partners excelled in 2022 with a dividend yield of 5.9%, benefiting from approximately 90% of its long-term contracts containing price escalation clauses, which help maintain profitability in inflationary conditions.
- Dominion Energy's Growth Potential: Although Dominion Energy's stock price fell in 2022, its outlook remains positive due to rapid data center construction and an acquisition deal with NextEra Energy, with a dividend yield of 3.93%, indicating strong future prospects.
See More
Top Dividend Stocks Thrive in Current Market Conditions
- Coca-Cola's Dividend Advantage: The Coca-Cola Company has increased its dividend for 64 consecutive years, with a current yield of 2.6%, providing stable cash flow in a high-inflation environment, thereby boosting investor confidence.
- Enterprise Products Partners' Inflation Resilience: Enterprise Products Partners has approximately 90% of its long-term contracts with price escalation clauses, has increased its distribution for 27 consecutive years, and currently offers a distribution yield of about 5.9%, enabling it to achieve double-digit total returns under inflationary pressures.
- Dominion Energy's Market Potential: Despite a poor stock performance in 2022, Dominion Energy benefits from rapid data center construction, and its acquisition price is nearly 15% above its current stock price, indicating significant market value potential.
- Dividend Stocks' Market Performance: During the Fed's rate hikes in 2022, top-tier dividend stocks outperformed the S&P 500, demonstrating their appeal as safe havens, particularly in an environment of rising interest rates and persistent inflation.
See More
