10 Best Dividend-Paying Stocks Under $50

5. Enterprise Products Partners L.P. (NYSE:EPD)

Upside Potential as of August 16: 15.53%

Share Price as of the close of August 16: $29.17

Enterprise Products Partners L.P. (NYSE:EPD) is an American midstream natural gas and crude oil pipeline company that provides related products and petrochemicals. Energy companies are known for their generous dividends and EPD stands out as a particularly strong dividend investment. First and foremost, the company’s cash position is very strong to fund its dividends. In the second quarter of 2024, the company reported a distributable cash flow (DCF) of $1.8 billion, which showed a growth from $1.7 billion in the same period last year. Its operating cash flow for the period amounted to $2.1 billion, up from $1.9 billion in the prior-year period. Secondly, the company’s payout ratio is sustainable. For the twelve months ending June 30, the company’s payout ratio—encompassing distributions to common unit-holders and buybacks of partnership common units—was 55% of adjusted cash flow from operations.

Enterprise Products Partners L.P. (NYSE:EPD) gains significant advantages from its business model, which centers on midstream operations involving key infrastructure such as pipelines, storage facilities, and transportation systems. These assets are vital for connecting the upstream sector (drilling) with the downstream sector (refining and chemicals) and for linking to global markets. Midstream companies generally earn revenue by charging fees for the use of their infrastructure, operating as toll-taker businesses. As a result, their financial performance is primarily driven by energy demand rather than energy prices. Because energy demand remains robust even when prices are low, this model offers a degree of stability. In the second quarter of 2024, Enterprise Products Partners L.P. (NYSE:EPD) reported revenue of $13.48 billion, which saw a significant growth of 27% on a YoY basis.

On July 11, Enterprise Products Partners L.P. (NYSE:EPD) declared a 1.9% increase in its quarterly dividend to $0.525 per share. This marked the company’s second dividend hike this year and 26th consecutive year of dividend growth, which places EPD on our list of the best dividend stocks under $50. The stock has a dividend yield of 7.20%, as of August 16.

According to Insider Monkey’s database of Q2 2024, 23 hedge funds invested in Enterprise Products Partners L.P. (NYSE:EPD), which remained unchanged from the previous quarter. The consolidated value of these stakes is roughly $310 million.