Around the StreetAuthority office, we like tocall them
"Retirement SavingsStocks ."
That's because they can hand you a second income to supplement
what you are already earning.
And byinvesting in companies like these, youput yourself above
other investors when it comes to beating themarket .
Just consider this...
From 1972 through 2011, U.S.-baseddividend stocks in the S&P
500 returned 7.1% annually, far exceeding the 1.5% return for
When picking stocks to add to my
portfolio, these are some of the criteria I look at when evaluating
an income investment:
1. Long track record of paying consistent and rising
2. Matching history of improvingearnings
3. Strongcash flow sufficient to pay dividends and then some
4. High projected growth that can lead to dividend increases
5. Zero or little debt, because debt-free companies have
morecash to distribute
6. Noncyclical business models that canprofit in all markets and
at all times
If any security meets the high-yield/low-risk mandate of
Enterprise is the largest publicly-traded energypartnership in
the United States. It operates more than 50,000 miles of pipelines,
enough to circle Earth twice.
These pipelines are connected to about 95% of the country's
refining capacity east of the Rockies.
The partnership is a dominant player in the rapidly-growing
natural gas liquids (NGLs) market, which contributed 57% of profits
My colleague, Paul Tracy, also named Enterprise Products
a Top-10 Stock for 2013... Partly because of the oil and natural
gas drilling boom in the U.S., and because of its exceptional
dividend track record.
In the past year, Enterprise Products has paid more than $2
billion in distributions. And sincegoing public in 1998, the
partnership has increased its distribution 43 times. In fact, the
company has increased its dividend every quarter since 2004, or 34
straight dividend hikes.
Enterprise receives a fixed fee, based on how much product runs
through its pipeline, ensuring steady cash flow regardless
I added Enterprise to my
portfolio in February 2007. Since then, I've received $12.88 per
share in distributions, and thestock has appreciated more than 75%
for a total return of close to 120%.
Despite paying an ever-increasing dividend, Enterprise
Products has been able to manage some major projects to ensure
it keeps growing. In the first nine months of 2012, it spent $1.7
billion on new projects. In 2013, it plans an additional $2.4
billion of capital projects.
In total, some $7.9 billion of projects are under construction
and scheduled to be completed during the next year and a half.
These projects position the company to benefit from the expected
growth in natural gas, NGL and crude oil from shale plays.
Risks to Consider:
Exposure to volatile natural gas and NGL prices can
affectrevenue and distributable cash flow. But I think the company
is pretty well shielded from these concerns.
Action to Take -->
Enterprise Products offers income investors a rising income
stream and steady priceappreciation . Not to mention, as aprime
Retirement Savings Stock
, it should be on every investor's watch list.