The stock market has been red-hot over the past year, setting several new all-time highs. That might make it easy to forget the tough times of the past.
Unfortunately, the market will eventually go through more storms in the future. Because of that, investors should look for ways to safeguard their portfolios ahead of future downturns. Enterprise Products Partners (NYSE: EPD), Brookfield Infrastructure (NYSE: BIP)(NYSE: BIPC), and Brookfield Renewable (NYSE: BEP) (NYSE: BEPC) stand out to a few Fool.com contributors for their resilient dividends. Here’s why they think investors should buy these high-quality, high-yielding dividend stocks ahead of the next market downturn to add a safety net to their portfolio.
The world needs Enterprise
Reuben Gregg Brewer (Enterprise Products Partners): The key story for Enterprise Products Partners is that it owns a massive collection of energy infrastructure in North America. The list of assets includes pipelines, storage, transportation, and processing facilities. The midstream business basically helps connect the energy sector’s upstream (production) to the downstream (chemicals and refining) and the rest of the world. The North American energy sector wouldn’t work without businesses like Enterprise.
The key for investors, however, is that Enterprise is basically just a toll taker, charging fees for the use of its vital energy-infrastructure assets. Thus, demand for energy is more important than the price of the commodities flowing through the master limited partnership’s (MLP’s) system. Energy is the lifeblood of the modern world, so demand tends to remain robust even when energy prices are low or economic activity falls off. This is how Enterprise has managed to increase its distributions for 25 consecutive years despite the inherent volatility of energy prices.
Now add in an investment grade-rated balance sheet and the fact that distributable cash flow covers the distribution by 1.7 times. There’s a lot of leeway for bad news here before a distribution cut would be in the cards. And, here’s the best part, the distribution…
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