Once a pipeline is built, it typically enjoys near-monopoly status and it acts like a tollbooth, capturing a steady stream of income year-in and year-out as oil and gas flows through its network.
Moreover, Enterprise operates a business that's vital to day-to-day life. Without the oil, natural gas and other commodities it ships through its pipelines, our lives would be drastically different.
As U.S. oil production continues to rise, Enterprise should see increasing demand for its pipelines and services. And because the company is structured as an MLP, it is required to pay 90% of its earnings to shareholders. This should translate into rising distributions for shareholders.
In the past year, Enterprise has paid more than $2 billion in distributions. And since going public in 1998, the partnership has increased its distribution 40 times. In fact, the company has increased its dividend every quarter since 2004.
Right now Enterprise pays a 5% dividend yield. That's not bad considering the average stock in the S&P 500 yields just 2.11%. And with the partnership's rising distribution payments, investors who buy today will likely enjoy a higher yield in the future.
[Note: One stock has raised dividends 463% since 2004... another has $9.21 per share in cash (49% of its share price)... another has returned 137% in three years -- more than triple the S&P's 39% gain. These are the type of investments that make up my Top 10 Stocks for 2013 report.
To learn more about these top picks for the coming year, visit this link.]
Get the Market Movements in Advance: William's Edge Webinar for Tuesday, March 11th, 2014 | John Ransom