Become a Dividend Millionaire by Investing $50,000 in Enterprise Products Partners LP
Benzinga and Yahoo Finance LLC may earn commission or revenue on some products through the links below.
Billionaire investors like Warren Buffett have built their wealth by focusing on dividend stocks that combine steady income, strong growth, and safety, and one Dividend Aristocrat that fits this criteria is Enterprise Products Partners LP (NYSE:EPD) .
These five entrepreneurs have a combined net worth of $223 billion, and they all believe in one company that can lend to businesses at an annual interest rate of 7-9%.
Company Profile
Enterprise Products Partners LP is a leading American midstream natural gas and crude oil pipeline company with a market capitalization of $64 billion as of July 2024. This large-cap stock is favored by institutional investors, with large hedge funds holding roughly 26% of the stock. The company currently offers a dividend yield of 7.09%, significantly higher than the industry average of 4.38% and the S&P 500 average of 1.3%.
Dividend performance
EPD has a long history of paying dividends, having consistently increased its quarterly dividend since 1998. Over the past decade, it has achieved an annual dividend growth rate of 3.90%. The company maintains a high dividend payout ratio of 80%, compared to an industry average of 40%, while its strong financial position supports the sustainability of these dividends. A key factor in this stability is EPD’s business model: at least 60% of EPD’s revenue comes from long-term fixed-fee contracts, providing a buffer against economic downturns.
Recent Developments and Projects
As of mid-2024, Enterprise Products Partners has $7.1 billion worth of projects under construction, including a large-scale natural gas processing plant. These new ventures are expected to drive growth and improve earnings. The company’s recession-proof model and robust project pipeline position it well for future success as long as demand for natural gas remains strong.
Analyst ratings and stock price performance
Recent analyst ratings highlight EPD’s bright outlook: Morgan Stanley, JP Morgan, and Truist Securities issued their ratings on June 15, 2024, May 22, 2024, and May 10, 2024, respectively. They set an average price target of $34.50, indicating a potential upside of 19.3% from the current price, which suggests significant growth potential on top of an already attractive dividend yield.
Investor alert: Triple net properties can put a check in your pocket every quarter — this is an opportunity accredited investors can’t miss.
Investment Forecast
To estimate the likelihood that your investment in EPD will grow to over $1 million, consider starting with $50,000 and increasing it by $500 per month. Assuming the current dividend yield remains stable and the expected growth rate of the stock price is 6% per year, here’s how your investment will grow over time.
The story continues
Year
Initial number of shares held
Starting stock price
Final dividend (after tax)
Ending balance (after tax)
2024
1,449
$34.50
$2,493
$52,993
2025
1,517
$36.57
$2,775
$62,768
2026
1,591
$38.76
$3,084
$73,109
2027
1,670
$41.08
$3,422
$84,081
2028
1,755
$43.55
$3,791
$95,752
2029
1,846
$46.16
$4,193
$108,194
2030
1,943
$48.93
$4,630
$121,483
2031
2,047
$51.87
$5,105
$135,699
2032
2,157
$54.98
$5,620
$150,927
2033
2,274
$58.28
$6,179
$167,259
2034
2,398
$61.78
$6,785
$184,785
Investor sentiment
Recent data indicates growing retail investor interest in EPD, with trading volumes increasing over the past few months, reflecting confidence in the company’s ability to maintain and grow its dividend payments.
Conclusion
Enterprise Products Partners LP presents a compelling case for dividend investors with its high yield, steady dividend growth, and strong financial health. By investing $50,000 and continually adding $500 each month, investors could see significant growth over time and reach millionaire milestones. However, no investment is without risk. This solid company has easily weathered major downturns so far, but there’s always a chance that the future of the energy industry could take a different direction. For now, Enterprise Products Partners LP offers a steady income with the potential for future growth.
Disclosure: This story previously appeared on Benzinga and has been updated.
There are better high-yield opportunities
The current high interest rate environment is creating an excellent opportunity for income-seeking investors to earn huge yields, and not just through dividend stocks… Certain private market real estate investments offer individual investors the opportunity to take advantage of these high-yield opportunities, and Benzinga has identified some of the most attractive options to consider.
For example, Basecamp Alpine Notes offer a 9% target APY with a term of just three months, making them a powerful short-term cash management tool with great flexibility. EquityMultiple has issued 61 Alpine Notes series and has met all payment and funding obligations without any late or missed interest payments. Basecamp Alpine Notes has a low minimum investment of just $1,000, making it easier than ever to start building a high-yield portfolio.
Don’t miss out on this opportunity to take advantage of high-yield investments while interest rates are high. Check out Benzinga’s favorite high-yield products.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The article Invest $50,000 In Enterprise Products Partners LP And Become A Dividend Millionaire originally appeared on Benzinga.com.