Now compare this with an extremely popular and much larger midstream company in Enbridge Energy Partners, L.P. (NYSE:EEP). The payouts between the two companies are actually quite similar, with Enbridge yielding 6.7% and Boardwalk Pipeline Partners, LP (NYSE:BWP) yielding 6.6%. However, profit margins are considerably higher for Boardwalk, and its annual dividend growth history is certainly more appealing. Enbridge shareholders have seen their payout grow by an average of 2.4% per year since 2006 while Boardwalk, even excluding its very first payout, which would skew the results, grew its yield by an average of 5.8% per year. Furthermore, trailing-12-month operating cash flow as a percentage debt is higher for Boardwalk as compared with Enbridge, signaling the stability of its debt relative to its cash-generating capabilities. I have absolutely nothing against Enbridge Energy Partners, but Boardwalk is statistically the better-looking midstream MLP!
This looks like a pretty open-and-shut case of a company that’s perfectly positioned to take advantage of the upcoming energy boom. Boardwalk Pipeline Partners, LP (NYSE:BWP) has its infrastructure set up in key shale regions to avoid many of the gluts that previously weighed down the sector, it’s forged a valuable Northeast-to-Gulf Coast partnership with Williams Companies, Inc. (NYSE:WMB), and it’s just relatively inexpensive compared with some of its peers. It’s especially attractive if you consider that reinvesting the dividend proceeds could result in a doubling of your money in less than 11 years if the stock price stays at the same level it’s at now or heads higher. I like those odds!
The article 1 Great Dividend You Can Buy Right Now originally appeared on Fool.com.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool has options on Chesapeake Energy.
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