If You Like Enterprise Products Partners, You Should Check Out This More Than 10%-Yielding Peer

If you're an investor who appreciates the steady, high-yielding income stream offered by Enterprise Products Partners (EPD), you might want to consider Targa Resources (TRGP). While EPD provides a 7.8% yield, TRGP boasts an impressive 10.5% yield, making it an attractive alternative for those seeking a more dynamic income stream.

TRGP's earnings and free cash flow growth rates are significantly higher than EPD's. In 2022, TRGP's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 22%, compared to EPD's 6.5%. Additionally, TRGP's free cash flow increased by 14% in 2022, while EPD's free cash flow grew by a mere 2%. This faster growth rate, coupled with a higher yield, makes TRGP an appealing option for investors looking for a more dynamic income stream.

TRGP's dividend growth history and consistency are also worth noting. While EPD has a slightly higher 10-year compound annual growth rate (CAGR) of 6.1%, TRGP's 10-year CAGR is 5.5%. Both companies have strong balance sheets and stable cash flows, but TRGP's higher yield and consistent dividend growth history make it a compelling option for income-oriented investors.

TRGP's earnings growth rate is another factor that sets it apart from EPD. While EPD has a solid 6.5% earnings growth rate, TRGP boasts an impressive 22% growth rate. This higher growth rate is driven by TRGP's focus on natural gas liquids and its strategic expansion projects.



TRGP's projected free cash flow (FCF) growth is expected to be around 15% annually over the next five years, significantly higher than EPD's projected FCF growth of approximately 6%. This is driven by TRGP's faster earnings growth, which is projected to be around 12% annually compared to EPD's 6%. Additionally, TRGP's dividend growth is expected to be around 15% annually, outpacing EPD's 5% annual dividend growth.



In conclusion, if you're a fan of EPD's steady, high-yielding income stream, you should consider TRGP. Its higher yield, faster growth rates, and consistent dividend growth history make it an attractive alternative for investors seeking a more dynamic income stream. By diversifying your portfolio with TRGP, you can benefit from its impressive earnings growth, free cash flow growth, and dividend growth potential.