Are you looking to add diversified energy stocks with high yields to your portfolio? Chevron (NYSE: CVX) and Enterprise Products Partners (NYSE: EPD) are two options worth considering.
Chevron is a well-managed integrated energy major with a market cap of $270 billion. It has operations in energy production, transportation, and chemicals/refining, providing geographic and operational diversification. The company offers a solid 4.3% dividend yield with a track record of increasing annual dividends for 37 years. However, Chevron’s upstream and downstream operations are tied to commodity prices, leading to volatility in financial results.
On the other hand, Enterprise Products Partners is a master limited partnership (MLP) focused on the midstream segment of the energy sector. With a 7.2% dividend yield, it operates essential transportation assets like pipelines, generating reliable cash flows from fees. Enterprise has increased its distribution for 26 consecutive years, with distributable cash flow covering distributions 1.7 times. The midstream segment’s stability and high yield make it an attractive option for income-focused investors.
While Chevron offers broad exposure to the energy sector, Enterprise Products Partners may be a better choice for investors seeking high yield and stability. The MLP’s consistent distribution growth and reliable business model make it a compelling option for conservative income investors. If you prioritize yield over diversification, Enterprise’s 7.2% yield could be a more suitable investment for your portfolio.
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Disclaimer: Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron and Enterprise Products Partners. Stay informed with Extreme Investor Network for the latest market updates and investment opportunities.
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