Spectra Energy Partners LP, (SEP) -A High Profit Margin, High Dividend Energy Stock

By Robert Hauver

Spectra Energy Partners LP, (SEP), is an oil & pipeline firm just listed in the Energy table section of our High Dividend Stocks by Sector Tables. SEP’s 79.99% profit margin is the second highest in the Oil & Gas Pipeline group.

SEP also outshines its peers in many other figures in our Industry Comparison table:

Spectra Energy Oil & Gas Pipeline Industry
Profit Margin 79.99% 15.29%
Debt/Equity .31 1.63
Return On Assets 7.48% 4.18%
Return On Equity 10.00% 7.91%
Return on Income 7.79% 5.18%
P/E 17.89 25.33
Price/Book 1.8 2.72

Spectra’s $1.60/unit annual dividend appears to be covered by $1.66 EPS, and in line with the 90% mandate for LP’s, with a dividend payout ratio of 91%.  SEP has steadily increased its quarterly dividends, from $.30/unit/quarter, to $.40/unit/quarter, since October 2007, and currently has a 5.39% dividend yield.

For investors who want to immediately increase their yield by trading options and selling covered calls, the June 2010 $30.00 call option, (SEPFF), has a current bid/ask of $1.15/$1.45, which is an additional 9.18% annualized yield on the bid price.  (The current Put option prices aren’t very attractive).

Disclosure: No positions yet.

Disclaimer: This article is written for information purposes only.