Energy Transfer vs Enterprise Products: Which is the Better Dividend Stock?
Energy Transfer LLC (ET -0.41%) and Enterprise Products Partners (EPD 0.88%) are both significant players in the energy sector, each offering high dividend yields to income investors. However, a closer look reveals differences in their track records and recent activities that may impact investor decisions.
Energy Transfer currently offers a high dividend yield of 7.5%, but its history has been marked by specific negative events in 2016 and 2020. These incidents, though not detailed, have impacted shareholder confidence. In 2016, Energy Transfer attempted to buy Williams Companies but abandoned the merger due to an energy sector downturn, raising questions about insider influence. Despite these concerns, Kelcy Warren, Energy Transfer's executive chairman, recently bought nearly 34.7 million units, signaling confidence in the company's future.
On the other hand, Enterprise Products Partners offers a slightly lower yield of around 6.9% but has a more stable history. It has increased its annual distributions for 27 consecutive years, providing income investors with consistent returns. Unlike Energy Transfer, Enterprise Products Partners has no similar incidents in its past that could worry income investors. Additionally, Energy Transfer cut its distribution in 2020 during the pandemic, which could be a red flag for income-focused investors.
While both companies offer attractive dividend yields, Enterprise Products Partners' stable history and lack of similar incidents make it a more appealing choice for income investors. Energy Transfer, despite its high yield and recent insider buying, has a history of negative events and a distribution cut during the pandemic, which could be concerning to income-focused investors.
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