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Enterprise (EPD) Hikes Q4 Cash Distribution to 46.5 Cents

In fourth-quarter 2021, Enterprise (EPD) purchased $125 million of its common units in the open market.

This story originally appeared on Zacks

Enterprise Products Partners L.P. EPD announced that its board of directors increased its cash distribution for fourth-quarter 2021 to 46.5 cents per unit ($1.86 per unit on an annualized basis).

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The cash distribution suggests a 3.3% hike from the previous dividend of 45 cents. The quarterly distribution will be paid out on Feb 11, 2022, to common unitholders of record as of the close of business on Jan 31, 2022.

In fourth-quarter 2021, Enterprise purchased $125 million of its common units in the open market. The purchased units resulted in total share buybacks in 2021 to $200 million. The partnership utilized 24% of its $2-billion buyback program authorized in January 2019, which includes these repurchases.

The hike in cash distribution is reflective of Enterprise’s strong performance. EPD continues its history of consistently returning capital to investors. The partnership will continue to assess new market opportunities to increase future cash distributions, invest in midstream projects, buy back common units and maintain a healthy balance sheet.

Enterprise is strongly committed to returning cash to shareholders. After raising distributions for over 23 years, Enterprise is well-positioned to continue hiking distributions in the coming years, backed by a stable business model. With a lower payout ratio compared with the industry’s levels, the partnership’s distribution payments seem sustainable.

Company Profile & Price Performance

Based in Houston, TX, Enterprise is among the leading midstream energy players in North America.

Shares of EPD have outperformed the industry in the past three months. The stock has inched up 0.9% against the industry’s 3.7% decline.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank & Key Picks

Enterprise currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA Inc. MUSA, based in El Dorado, AR, is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA’s unique high-volume, low-cost business model helps it retain high profitability amid the fiercely-competitive retail environment.

Murphy USA is committed to returning excess cash to shareholders through continued share buyback programs. As part of the initiative, the fuel retailer recently approved a repurchase authorization of up to $1 billion, which will commence once the existing $500-million authorization expires and be completed by Dec 31, 2026. The move underscores MUSA’s sound financial position and commitment to rewarding shareholders.

TotalEnergies SE TTE has one of the best production growth profiles among the oil super majors, characterized by an upstream portfolio, with above industry-average exposure to the faster-growing, hydrocarbon-producing regions of the world. TTE is making regular investments to expand the renewable operation and strives to achieve net-zero emission by 2050.

TotalEnergies currently has a Zacks Style Score of A for Value and B for Growth. TotalEnergies manages long-term debt efficiently and tries to maintain the same at manageable levels. Its debt to capital has been declining in the past few years.

Sunoco LP SUN is a master limited partnership that distributes motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors. In the United States, Sunoco is among the largest motor fuel distributors in the wholesale market by volume. By 2020, the partnership sold 7.1 billion gallons of motor fuel.

Sunoco currently has a Zacks Style Score of A for Value and B for Growth and Momentum. For 2021, Sunoco expects fuel volumes of 7.25-7.75 billion gallons, indicating a rise from the 2020 reported level of 7.09 billion gallons.

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