Lower prices for oil and gas have hurt the energy sector; Enterprise Products Partners (EPD) — with a yield of 6.86% yield — is now down for the year, observes Mark Skousen, growth and income expert and editor of Forecasts & Strategies.

Enterprise is less volatile than many energy sector peers and is fundamentally strong. It owns and operates 50,000 miles of pipelines, and controls storage capacity for 160 million barrels of oil and 14 billion cubic feet of natural gas. Enterprise also holds import/export terminal facilities on the Gulf Coast of Texas.

It reported a slight decline in revenue to $8 billion, but still performed better than expected. Earnings came in at 54 cents per unit, down from 59 cents from a year ago. Notably, in 2019, the partnership had completed the construction of $5.4 billion of capital projects, so I remain upbeat.

In fact, RBC Capital  is so enthused about EPD that it has raised its target price to $36 a share. That’s a 40% upside potential!

The Wall Street firm stated, “EPD offers investors broad exposure to a full spectrum of the midstream value chains for NGLs and, increasingly, crude and petrochemical products. Furthermore, the partnership’s multi-year organic growth backlog helps provide visibility on long-term distribution growth.”

Enterprise Products Partners has done its job in a very ugly environment. It has delivered solid income: the dividend yield currently sits above 6% and has stayed above at least 5.5% for the last three years. And it has avoided significant principal losses even with unfavorable energy prices. Keep buying.

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