Maurice was discovered mid-afternoon, sitting cross-legged in front of his monitors with a banana in each hand, cackling like he’d just discovered the meaning of compound interest. His tiny tie had been loosened exactly one knot.
Listen, I’m going to tell you something that’ll sound crazy coming from a monkey who throws fruit at charts for a living: sometimes the most exciting investment is the one that does absolutely nothing interesting. No Tesla-style volatility. No meme-stock drama. No late-night Twitter wars about whether the CEO knows what he’s doing. Just a company that quietly, methodically, shows up every three months and deposits money into your account like clockwork.
That company is Enterprise Products Partners L.P. (EPD), and I just spent the better part of my morning hugging this stock like it was a crate of the world’s finest bananas.
What We’re Actually Looking At Here
EPD is the kind of company that most people don’t even know exists, which is precisely why it’s brilliant. They move oil, gas, natural gas liquids, and petrochemicals through pipelines. They own storage facilities. They operate marine terminals. In short: they’re the invisible plumbing of the American energy system, and every time energy flows through the country, EPD gets paid a toll.
Think of it like this—imagine owning the highway instead of the car factory. The car factory obsesses over design, quarterly earnings surprises, and whether anyone’s buying their new model. The highway? The highway just sits there, collects tolls, and doesn’t care if Teslas or Hummers are driving on it. Both pay the same.
That’s the midstream business. That’s EPD.
The Dividend Math That’ll Make You Giddy
Here’s where I literally threw a banana at my monitor in genuine excitement. This company is yielding 8.2%. Not 4%. Not 5%. Eight. Point. Two. Percent. At a current price hovering around $37, that means if you threw $10,000 at this stock, you’re looking at roughly $820 per year in dividends. Every. Single. Year.
And they’re raising it. Consistently. The most recent quarterly dividend came in at $0.55—a number that’s been marching steadily upward like a well-trained monkey up a vine. They’ve got a payout ratio of 0.81, which means they’re returning 81 cents of every dollar earned to shareholders. That’s not reckless abandon; that’s disciplined generosity.
The beauty of this payout ratio is that it’s sustainable without being skinflint. They’re not paying out 120% of earnings and borrowing from the future. They’re not paying out 30% and hoarding cash like some tech billionaire. They’ve found the sweet spot—the Goldilocks porridge of dividend distribution.
The Beta That Won’t Give You Heartburn
You know what’s completely unsexy but absolutely magical? A beta of 0.529. Translation: when the market sneezes, EPD doesn’t develop pneumonia. It might get a mild cold. The broader market could drop 20% and this stock might drop 10%. In a bull market where everything’s up 40%, EPD might climb 21%. That’s what low beta means—you’re insulated from the absolute worst days without missing too many of the good ones.
For income investors (and that’s who should be buying this), beta is everything. You’re not trying to turn $10,000 into $500,000 in three years. You’re trying to build a cash-flowing machine that lets you sleep at night. Low beta is the sleep aid. The melatonin. The soft pillow on which you rest your weary head.
The Nerdy Stuff That Actually Matters
The forward P/E sits at about 12, which means you’re paying 12 dollars for every dollar of expected earnings. That’s not cheap by absolute standards, but it’s reasonable for a company with this much cash-generation certainty. The typical S&P 500 company trades at 18-20 times forward earnings. EPD at 12 means you’re getting paid a premium to wait.
Free cash flow is the real star here—$22.25 billion in the most recent period. That’s the money left over after the company pays for operations and capital expenses. That’s the money that becomes your dividend. When you see cash flow that massive supporting an 8.2% dividend, you’re not looking at financial wizardry or accounting tricks. You’re looking at genuine, flowing cash.
The debt-to-equity ratio is admittedly high at 113.9%, but—and this is critical—don’t panic. For a regulated midstream company with long-term, predictable cash flows locked in by contract, leverage is a feature, not a bug. These aren’t startup tech companies betting on moonshots. These are utility-like operations that can safely borrow money to fund operations and expansions. The cash flows are locked in. The credit is solid.
Where We Stand Right Now
The stock’s trading at $37.37, which is already above Bully Bob’s entry price of $33.19. Don’t let that discourage you. The 52-week range is $29.66 to $39.74, so we’re sitting near the upper end of recent trading, but we’re not at the ceiling. Jefferies just raised their price target to $40, and the consensus among 21 analysts puts the target at $39.14. That suggests another 5% of upside before we even get to where the smart money thinks fair value is.
But here’s the thing about income stocks—you’re not buying them for 5% price appreciation. You’re buying them for the 8.2% yield. You want to know what happens to a $10,000 position in EPD over the next five years if it just sits there, the dividend gets reinvested, and the stock price stays exactly where it is? You’d have roughly $14,700. That’s not from stock price appreciation. That’s from dividends compounding.
Now imagine the stock does appreciate to $40-42 (which seems likely). Now you’re looking at $16,000-17,000. That’s a respectable return for owning the plumbing instead of the cars.
The Risks I’m Not Going to Hide From You
Energy infrastructure is sensitive to policy. A Democratic administration that really, truly wants to kill fossil fuel usage could pressure these companies. The Biden administration hasn’t been kind to pipelines (see: Keystone). Could that happen again? Maybe. Would it happen fast? No. EPD’s got contracts locked in for years. Any political disruption would be measured in years and court battles, not quarters.
Second risk: interest rates. If the Fed keeps rates high, the company’s borrowing costs stay elevated. That eats into the margins and could pressure future dividend growth. However, the company’s already locked in much of its debt at fixed rates, so a sudden rate increase doesn’t immediately destroy returns.
Third: energy demand. A genuine recession that crushes oil and gas consumption could reduce the volume flowing through these pipelines. But here’s the thing—even in the COVID-19 crash of 2020, this stock held up better than most and kept paying dividends. These are essential pipes. Even in a downturn, people still need fuel.
The short ratio sits at 4.46, which means short sellers are reasonably confident in their bearish thesis. That’s worth noting but not alarming. For a $81 billion company with 8.2% dividend support, 4.46 short ratio is actually pretty low.
Who Should Actually Buy This?
If you’re 25 years old and believe you have 40 years until retirement, this isn’t your stock. You need growth. You need volatility. You need to swing from financial vines and take risks. Come back in 30 years when your nest egg is large and you want it to print cash.
If you’re 55 with $500,000 saved and you want to generate $40,000 a year to supplement Social Security? This is absolutely, unequivocally your stock. If you’re retired and living off investment income? This is your stock. If you’re in your 40s and you’ve reached “enough” and you just want your money to work quietly without stressing you out? This is your stock.
This is the stock for people who understand that boring, predictable, and consistent beats exciting, volatile, and speculative.
The Bottom Line From My Banana Crate
Enterprise Products Partners is the financial equivalent of a reliable old pickup truck. It’s not flashy. It’s not going to impress anyone at the country club. But it’ll show up every day, do its job, and if you actually need something transported, it’ll get you there without drama. And every quarter, it quietly dumps money in your lap.
At $37.37 with an 8.2% yield, consensus analyst targets around $39, and a dividend growth track record that’s boring in the best possible way, this stock deserves a spot in any income-oriented portfolio. Bully Bob nailed this one. The math works. The cash flows work. The dividend works.
Now if you’ll excuse me, I’m going to go sit on a stack of bananas I’ve earned from this analysis and contemplate the peaceful feeling of cash-flowing assets.
Disclaimer: Trained Market Money, Maurice, and our entire primate analysis team provide entertaining market commentary only. While Maurice’s Monkey Momentum Index™ and banana-based technical analysis have shown mysterious accuracy, they should never be considered financial advice. All investment decisions should be made in consultation with qualified financial professionals, not monkeys – no matter how impressive their fruit-throwing abilities may be. For real financial advice, please consult your financial advisor, who probably doesn’t accept bananas as payment.
Coming next week: We’re peeling back the layers on a semiconductor stock that’s making bananas at the GPU game. Maurice suspects the peel-and-stick valuations might finally make sense. #MonkeyMomentum
Maurice’s final wisdom: “The best investment is the one that lets you sleep. EPD? That’s Ambien in stock form.”
Trained Market Monkey 