Enterprise Products Partners LP (EPD)

[winchem21]

MLPs have been out of favor with investors this year and many have been selling their MLP fund shares. EPD is a major holding for these funds.

EPD also decreased the dividend rate of growth for the next six quarters from 4.6% to 2.3% in early October to eliminate the need to raise equity to fund their expansions as they have been doing for years due to the low value equity markets have been assigning to their units. IMO, this is a very positive move to prevent further unit dilution and more evidence of the exceptionally strong management team at EPD. This dividend growth rate cut has also been a contributing factor to the recent sell-off.

Earnings call is next week..The yield is near 7%, there is a 5% discount for DRIPs, and the US exports of energy and petrochemicals is just getting started. This is both a high yield and value play coupled with the tax advantages of an MLP.