- While past performance is no guarantee of future results, there are three reasons why we fully expect 20% undervalued Enterprise Products Partners to deliver 17% CAGR long-term total returns.
- Recession-resistant business model means this 6.6% yield is safe in all economic and market conditions.
- Strong long-term growth prospects and a rock solid self-funding business model.
- Attractive valuation results in market-smashing return potential.
- This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »
This article was co-produced by Dividend Sensei and edited by Brad Thomas.
There's nothing more we love than being able to recommend a high-yielding 11/11 quality Super SWAN trading at a significant discount to fair value.
Enterprise Products Partners (EPD) is the highest-quality midstream stock in America and a legend when it comes to delivering generous, safe and steadily growing income, as well as market-spanking, long-term returns.
Enterprise Products Partners Total Returns Since 1999
(Source: Portfolio Visualizer) portfolio 1 = EPD
The best management team in the industry's laser-like focus on long-term value creation has helped EPD triple the market's returns over the past two decades, with average rolling returns that are double or triple that of the S&P 500 over every time frame.
It's also achieved this with 68% less volatility over time, meaning nearly a three times better reward/risk ratio (excess total returns/negative volatility, aka "the Sortino Ratio").
While past performance is no guarantee of future results, there are three reasons why we fully expect 20% undervalued Enterprise Products Partners to deliver 17% CAGR long-term total returns. That's because it's now trading at just 7.4 times EBITDA, the lowest valuation since October 2011.
(Source: F.A.S.T Graphs, FactSet Research)
It's the best time in eight years to buy Enterprise, making it not just a "very strong-buy" but one of the best 6.6%-yielding income growth stocks you can buy today.
Reason 1: Recession-Resistant Business Model Means This 6.6% Yield Is Safe In All Economic And Market Conditions
Enterprise is the only Super SWAN in its industry with 5/5 in dividend safety, a 3/3 business model and 3/3 management quality/corporate culture.
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