Insider Trading Report: Enterprise Products Partners LP (EPD)

John Rutherford, a director at Enterprise Products Partners LP (EPD), recently bought 10,000 more shares. The buy increased his stake by nearly 26 percent, and came to a total purchase price of just under $222,000.

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  • This is the first insider buy in nearly a month. Overall, company insiders have been buyers of shares with just one small exception over the past three years back in 2019.

    In total, company insiders own about 32.5 percent of shares.

    Shares of the partnership are up about in line with the S&P 500 index over the past year. Structured as a partnership, shares pay an outsized yield of about 8.2 percent.

    The oil and gas midstream company has generally been rising or falling in line with the prices of oil in the past year. However, with a valuation of around 10 times earnings and offering a high yield, shares look like an attractive way to play a further potential rise in energy prices going forward.

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  • Action to take: The outsized dividend yield makes the shares a more attractive buy right now compared to an options trade. The company’s yield was increased just slightly over the past year, but the yield is sufficiently high to offset some of the volatility in the energy markets.

    For traders, a better way to use options here might be to sell a put option instead, to try and get in at a better price and get paid to do so. The December $22 puts are a near-the-money trade that yield about $1.10 right now, or more than half the stock’s annual payout in under 4 months.

     

    Disclosure: The author of this article has no position in the company mentioned here, and will likely not trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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