Enterprise Products Partners offers 6.3% dividend yield

Some investors are looking for safer investments as the S&P 500 index has dipped into correction territory. One option is Enterprise Products Partners (EPD), a company in the energy sector that offers an attractive high-yield distribution. Enterprise Products Partners provides a distribution yield of 6.3%, which is much higher than the average S&P 500 yield of 1.2% and other sectors like real estate and utilities. The company has been increasing its distributions every year for 26 years, making it a reliable choice for income-seeking investors. Many might think the high yield suggests risk, but Enterprise has an investment-grade balance sheet. Its cash flow covers its distribution by 1.7 times, meaning it can withstand financial difficulties without cutting payments. The company had a record year in 2024, producing its highest cash flow ever. Enterprise operates in the midstream part of the energy sector, which is more stable than other areas. It charges fees to transport energy, so its success is less affected by fluctuating energy prices and more by the demand for energy. This business structure gives it reliability as an income stock. For investors seeking a less volatile option, adding Enterprise Products Partners to a dividend portfolio could be a smart choice. The company has significant projects in progress that will likely help grow income for investors, even if the market remains uncertain.