Should You Buy Enterprise Products Partners While It's Below $35?
Enterprise Products Partners (NYSE: EPD) units have recovered from their post-COVID-19 pandemic lows. But they still haven't regained the highs achieved before the 2016 energy downturn. While the midstream industry is different today than it was before 2016, Enterprise is proving it knows how to handle itself no matter what the energy sector throws its way. Here's why this North American midstream giant is worth buying while it is below $35.Enterprise is a master limited partnership (MLP), which means it is a pass-through entity designed to provide investors with a large income stream. There are pros and cons to being an MLP. For example, some of the income investors receive will be protected from current-year taxation because it gets classified as a return of capital. That's good news, of course, but it means that taxes will be higher when the stock is sold because return of capital lowers the cost basis of the investment. And then there's the K-1 form to deal with come tax time. All in, however, more active income investors will probably find Enterprise's 6.8% yield enticing.Image source: Getty Images.Continue reading
Enterprise Products Partners (NYSE: EPD) units have recovered from their post-COVID-19 pandemic lows. But they still haven't regained the highs achieved before the 2016 energy downturn. While the midstream industry is different today than it was before 2016, Enterprise is proving it knows how to handle itself no matter what the energy sector throws its way. Here's why this North American midstream giant is worth buying while it is below $35.
Enterprise is a master limited partnership (MLP), which means it is a pass-through entity designed to provide investors with a large income stream. There are pros and cons to being an MLP. For example, some of the income investors receive will be protected from current-year taxation because it gets classified as a return of capital. That's good news, of course, but it means that taxes will be higher when the stock is sold because return of capital lowers the cost basis of the investment. And then there's the K-1 form to deal with come tax time. All in, however, more active income investors will probably find Enterprise's 6.8% yield enticing.
Image source: Getty Images.
