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Bull of the Day: Enterprise Products Partners L.P. (EPD)
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Enterprise Products Partners L.P. (EPD - Free Report) is a leading provider of midstream energy services in North America. EPD shares have ripped higher in 2022 to outpace its surging Oil and Gas Production-Pipeline Market.
Enterprise Products Partners stands to benefit as oil and energy prices continue to climb and EPD’s dividend yield should help investors try to keep pace with 40-year high inflation.
Growing in the Midstream
The oil and gas industry is divided into three major components: upstream, midstream, and downstream. Enterprise Products Partners’ midstream segment is focused on the transportation and storage side of the equation.
Enterprise Products Partners L.P. is one of the largest publicly traded master limited partnerships, and a leading North American provider of midstream energy services to producers and consumers of natural gas, natural gas liquids, crude oil, refined products, and petrochemicals.
Enterprise Products Partners boasts an extensive network of pipelines that spreads more than 50,000 miles. EPD’s storage capacity hovers at around 260 million barrels for NGLs, crude oil, petrochemicals, and refined products, with 14 billion cubic feet of natural gas capacity. Enterprise Products Partners also boasts 24 natural gas processing facilities, as well as 18 fractionators, 11 condensate distillation facilities, 19 deep-water docks, and more.
Image Source: Zacks Investment Research
Natural gas currently accounts for about 40% of U.S. electricity generation, which is by far the largest, ahead of nuclear, coal, and renewables all of which hover around 20%.
Meanwhile, despite the rise of Tesla and the push from major automakers such as Ford, electric vehicles account for under 5% of the U.S. market. This means that companies such as Enterprise Products Partners can play a role as part of a diversified portfolio during the current price boom and beyond.
Other Key Fundamentals
Enterprise Products Partners’ revenue soared 50% last year to $40.8 billion, marking its largest sales total since 2014. Zacks estimates call for its sales to climb another 20% in 2022 to reach $48.9 billion and then pop over 6% in FY23 to hit $52.9 billion. Both of these totals would represent new records, topping 2014’s $47.9 billion.
Meanwhile, Enterprise Products Partners’ adjusted earnings are projected to climb over 14% this year and 5% next year to come in at $2.52 per share. EPD’s earnings outlook has improved since its early May report that saw it beat our Q1 EPS by 15% and raise its outlook. The firm’s FY22 consensus EPS estimate is up 8% and its FY23 is 6% higher. This bottom-line positivity helps it land a Zacks Rank #1 (Strong Buy) right now.
Enterprise Products Partners lands “B” grades for Growth and Momentum in our Style Scores system and its Oil and Gas - Production Pipeline business sits in the top 12% of over 250 Zacks industries. Plus, eight of the 10 brokerage recommendations Zacks has are “Strong Buys,” alongside two “Holds.”
Image Source: Zacks Investment Research
Enterprise Products Partners Distributable Cash Flow was a record $1.8 billion for the first quarter of 2022, up from $1.7 billion in the year-ago period. And its well-positioned to generate additional cash flow from under-construction growth capital projects worth $4.6 billion.
Enterprise Products Partners’ quarterly $0.46 per unit dividend yields a 6.7% at the moment to roughly match its industry and below away oil and gas titans like Chevron (CVX - Free Report) and Exxon (XOM - Free Report) . This also crushes both the 10-year and 30-year U.S. Treasuries and could go a long way in helping investors try to keep pace with 8.6% inflation.
Image Source: Zacks Investment Research
Bottom Line
The energy sector went through a really rough back half of the past decade as oil prices cooled and technology stocks dominated. Enterprise Products Partners shares are still, however, up 420% since their debut in the late 1990s to blow away its industry and the broader Zacks Oil and Energy sector’s 60%. This falls behind the S&P 500’s 480% climb. But if you look at total returns, which factors in dividend payments and more, Enterprise Products Partners has skyrocketed roughly 2,400% vs. the benchmark’s 890%.
Zooming into the last two years, EPD shares have popped 40%, with it now up 26% in 2022. Some investors might also appreciate the fact that Enterprise Products Partners is trading at around $28 per share. This gives it plenty more room to run before it returns to its 2014 records of around $40 a share. And its current Zacks consensus price target marks 11% upside.
Enterprise Products Partners currently trades at 11.5X forward 12-month earnings, marking a slight discount to its industry and 20% value compared to the larger Zacks Oil & Gas Production Pipeline market. EPD trades 40% below its own 20-year median and 55% beneath its highs.
Despite the expansion of renewables such as solar and the growth of EVs, oil and natural gas will play a massive and crucial role in the U.S. and global economies for decades.
All in, investors might want to consider Enterprise Products Partners for its ability to expand in the near term amid soaring inflation, with oil and energy prices possibly heading even higher. Plus, its solid balance sheet and strong dividend payment are useful now and down the line.
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Bull of the Day: Enterprise Products Partners L.P. (EPD)
Enterprise Products Partners L.P. (EPD - Free Report) is a leading provider of midstream energy services in North America. EPD shares have ripped higher in 2022 to outpace its surging Oil and Gas Production-Pipeline Market.
Enterprise Products Partners stands to benefit as oil and energy prices continue to climb and EPD’s dividend yield should help investors try to keep pace with 40-year high inflation.
Growing in the Midstream
The oil and gas industry is divided into three major components: upstream, midstream, and downstream. Enterprise Products Partners’ midstream segment is focused on the transportation and storage side of the equation.
Enterprise Products Partners L.P. is one of the largest publicly traded master limited partnerships, and a leading North American provider of midstream energy services to producers and consumers of natural gas, natural gas liquids, crude oil, refined products, and petrochemicals.
Enterprise Products Partners boasts an extensive network of pipelines that spreads more than 50,000 miles. EPD’s storage capacity hovers at around 260 million barrels for NGLs, crude oil, petrochemicals, and refined products, with 14 billion cubic feet of natural gas capacity. Enterprise Products Partners also boasts 24 natural gas processing facilities, as well as 18 fractionators, 11 condensate distillation facilities, 19 deep-water docks, and more.
Image Source: Zacks Investment Research
Natural gas currently accounts for about 40% of U.S. electricity generation, which is by far the largest, ahead of nuclear, coal, and renewables all of which hover around 20%.
Meanwhile, despite the rise of Tesla and the push from major automakers such as Ford, electric vehicles account for under 5% of the U.S. market. This means that companies such as Enterprise Products Partners can play a role as part of a diversified portfolio during the current price boom and beyond.
Other Key Fundamentals
Enterprise Products Partners’ revenue soared 50% last year to $40.8 billion, marking its largest sales total since 2014. Zacks estimates call for its sales to climb another 20% in 2022 to reach $48.9 billion and then pop over 6% in FY23 to hit $52.9 billion. Both of these totals would represent new records, topping 2014’s $47.9 billion.
Meanwhile, Enterprise Products Partners’ adjusted earnings are projected to climb over 14% this year and 5% next year to come in at $2.52 per share. EPD’s earnings outlook has improved since its early May report that saw it beat our Q1 EPS by 15% and raise its outlook. The firm’s FY22 consensus EPS estimate is up 8% and its FY23 is 6% higher. This bottom-line positivity helps it land a Zacks Rank #1 (Strong Buy) right now.
Enterprise Products Partners lands “B” grades for Growth and Momentum in our Style Scores system and its Oil and Gas - Production Pipeline business sits in the top 12% of over 250 Zacks industries. Plus, eight of the 10 brokerage recommendations Zacks has are “Strong Buys,” alongside two “Holds.”
Image Source: Zacks Investment Research
Enterprise Products Partners Distributable Cash Flow was a record $1.8 billion for the first quarter of 2022, up from $1.7 billion in the year-ago period. And its well-positioned to generate additional cash flow from under-construction growth capital projects worth $4.6 billion.
Enterprise Products Partners’ quarterly $0.46 per unit dividend yields a 6.7% at the moment to roughly match its industry and below away oil and gas titans like Chevron (CVX - Free Report) and Exxon (XOM - Free Report) . This also crushes both the 10-year and 30-year U.S. Treasuries and could go a long way in helping investors try to keep pace with 8.6% inflation.
Image Source: Zacks Investment Research
Bottom Line
The energy sector went through a really rough back half of the past decade as oil prices cooled and technology stocks dominated. Enterprise Products Partners shares are still, however, up 420% since their debut in the late 1990s to blow away its industry and the broader Zacks Oil and Energy sector’s 60%. This falls behind the S&P 500’s 480% climb. But if you look at total returns, which factors in dividend payments and more, Enterprise Products Partners has skyrocketed roughly 2,400% vs. the benchmark’s 890%.
Zooming into the last two years, EPD shares have popped 40%, with it now up 26% in 2022. Some investors might also appreciate the fact that Enterprise Products Partners is trading at around $28 per share. This gives it plenty more room to run before it returns to its 2014 records of around $40 a share. And its current Zacks consensus price target marks 11% upside.
Enterprise Products Partners currently trades at 11.5X forward 12-month earnings, marking a slight discount to its industry and 20% value compared to the larger Zacks Oil & Gas Production Pipeline market. EPD trades 40% below its own 20-year median and 55% beneath its highs.
Despite the expansion of renewables such as solar and the growth of EVs, oil and natural gas will play a massive and crucial role in the U.S. and global economies for decades.
All in, investors might want to consider Enterprise Products Partners for its ability to expand in the near term amid soaring inflation, with oil and energy prices possibly heading even higher. Plus, its solid balance sheet and strong dividend payment are useful now and down the line.