For more than a century, Wall Street has been a wealth-creating machine. Today, investors have thousands of publicly traded companies and exchange-traded funds to choose from when putting their money to work.
But among the countless strategies that can be deployed to grow your Wall Street nest egg, few have been as successful over the past half-century as buying and holding high-quality assets. dividend stocks.
In recent weeks, Hartford Funds analysts have updated a host of data sets published in a report (“The Power of Dividends: Past, Present and Future”) published last year in collaboration with Ned Davis Research. In particular, the duo looked at the average annual returns of dividend payers versus non-payers over the past half-century (1973-2023), and compared the volatility of income stocks versus non-dividends. payers.
Hartford Funds found that publicly traded companies without dividends generated a modest average annual return of 4.27% over 50 years and were 18% more volatile than the benchmark. S&P500. On the other hand, dividend payers more than doubled the average annual yield of non-payers (9.17%), while being 6% less volatile than the closely followed S&P 500.
Energy is a sector known for its juicy dividends. The energy sector includes oil and gas (O&G) drilling, refining, and drilling companies, O&G equipment suppliers, and a handful of coal and uranium producers.
Of nearly 200 energy stocks with a market capitalization of at least $300 million, 50 support a very high-yielding dividend, that is, at least four times higher than the yield of the S&P 500. Among these 50 stocks High-octane Energy Income stocks are two historically inexpensive companies with an average yield of 9.87% that are just waiting to be bought now by opportunistic investors.
Time to Get Started: Enterprise Products Partners (7.27% Yield)
The first supercharged energy dividend stock that should entice investors to jump in is none other than Enterprise Product Partners (NYSE:EPD). Enterprise has a market-leading yield of 7.3% and has increased its base annual distribution in each of the last 25 years.
For some investors, the idea of putting their money in oil and gas stocks is worrisome given what happened to energy commodities four years ago. In April 2020, at the start of the COVID-19 pandemic lockdowns, crude oil futures prices briefly plunged to negative $40 per barrel.
However, Enterprise Products Partners was able to avoid this roller coaster. That’s because it’s not a borer. It is one of the largest midstream oil and gas companies in America.
Companies in the midstream sector are rather considered energy intermediaries. They contract with upstream (drilling) energy companies and manage the transportation and storage of oil, natural gas, natural gas liquids and refined products. Enterprise oversees more than 50,000 miles of transportation pipelines and can store in…
