UPS Dividend Yield Hits 6.5% Amid Business Overhaul Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Dividend Yield Increase: UPS's dividend yield has risen to 6.5% due to stock price declines driven by uncertainties surrounding its business overhaul, which may attract income investors, but the payout ratio exceeding 100% raises concerns about future dividend policies.
- Business Restructuring Plan: UPS is undergoing a business overhaul aimed at streamlining operations and focusing on its most profitable lines, a strategy that could enhance the company's market competitiveness in the long run but may exacerbate shareholder concerns about dividends in the short term.
- Stability Comparison: In contrast to UPS, Enterprise Products Partners offers a 6.8% dividend yield with a robust 1.7x coverage of its distributable cash flow, showcasing its stability and reliability in the energy infrastructure sector, making it a better fit for income-focused investors.
- Market Performance Discrepancy: While UPS faces restructuring challenges and significant stock price volatility, Enterprise has maintained a stable business model with a 27-year streak of annual distribution increases, indicating its ability to generate consistent cash flow growth even in a volatile energy market.
EPD
$31.92+Infinity%1D
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 35.11 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.
9 Analyst Rating
5 Buy
4 Hold
0 Sell
Moderate Buy
Current: 31.870
Low
33.00
Averages
35.11
High
38.00
Current: 31.870
Low
33.00
Averages
35.11
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.
