ConocoPhillips (COP), Enterprise Products Partners L.P. (EPD): Why I Love These Dividend-Paying Stocks

One reason I believe investors should continue to get raises is that Enterprise has a pipeline full of future growth projects. At last count, that pipeline of projects stood at approximately $7.5 billion and those are just the projects currently under construction. One of the most important projects is its ATEX Express pipeline, which will take ethane from the Marcellus and Utica to the Gulf Coast petrochemical market. This pipeline will help top producers like Chesapeake Energy Corporation (NYSE:CHK) be able to sell ethane at higher Gulf Coast prices, which is why Chesapeake has said that the project is “an important step toward obtaining premium pricing for the significant volumes Chesapeake will produce from this resource.”

For Enterprise Products Partners L.P. (NYSE:EPD), the project not only provides it with secure revenue from take-or-pay contracts but it gives the company a strategic asset in the region which it can leverage into future growth opportunities. For example, once Chesapeake Energy Corporation (NYSE:CHK) and its peers have outgrown the takeaway capacity from this and other projects that will come on line, Enterprise will be one of the first companies called to see if it can provide another solution.

The other reason why the company’s payout should continue to grow is the fact that Enterprise Products Partners L.P. (NYSE:EPD)’s earnings are rock solid. It estimates that about 81% of this year’s earnings will come from fee-based activities, such as take-or-pay contracts, which really reduces its earnings volatility. Again, the dividend is safe and more than likely going to keep growing.

Final Foolish thoughts
What I like most about these companies is that both offer a solid base of earnings with very visible growth. That’s a terrific recipe for a growing dividend, which is why I’m a big fan. I think both are great core stocks for any investor’s portfolio.

The article Why I Love These Dividend-Paying Stocks originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of Phillips 66, Enterprise Products Partners L.P. (NYSE:EPD), and ConocoPhillips (NYSE:COP). The Motley Fool recommends Enterprise Products Partners L.P. The Motley Fool has the following options: long January 01 2014 $20 calls on Chesapeake Energy, long January 01 2014 $30 calls on Chesapeake Energy, and short January 01 2014 $15 puts on Chesapeake Energy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.