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Here's Why You Should Retain Enterprise (EPD) Stock Now
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Enterprise Products Partners LP (EPD - Free Report) has witnessed upward estimate revisions for 2021 and 2022 earnings in the past 30 days. In fact, four out of eight analysts have revised earnings estimates upward for 2021, while five of eight analysts have upwardly revised the same for 2022. Also, despite coronavirus-induced uncertainties, this leading midstream energy player’s stock price has improved 4.9% month to date, outperforming the industry’s 3.7% growth.
Factors Working in Favor
The partnership, currently carrying a Zacks Rank #3 (Hold), has a stable business model and is not significantly exposed to the pandemic-induced volatility in oil and gas prices. Enterprise generates stable fee-based revenues from the extensive pipeline network that spreads across roughly 50,000 miles, transporting natural gas, natural gas liquids (NGLs), crude oil petrochemicals and refined products. Importantly, the pipelines are connected to the key shale plays in the United States and nearly 90% of the refineries in the east of the Rockies.
The midstream infrastructure provider also has storage assets that have the capacity to store roughly 260 million barrels of NGL, petrochemical, refined products and crude oil. The assets can also store 14 billion cubic feet of natural gas. Moreover, Enterprise Products has $3.6 billion of major capital projects under construction that are likely to provide incremental fee-based revenues.
Also, the partnership’s balance sheet has lower debt exposure than the composite stocks belonging to the industry. Its debt to capitalization ratio of 0.54 is lower than the industry’s 0.59. In fact, the ratio has persistently been lower than the stocks belonging to the industry over the past few years. Moreover, the partnership’s long-term midstream contracts — which depict a stable business model — reflect its strong capability to pay off $29.9 billion of total debt principal outstanding as of Dec 31, 2020.
Risks
It is to be noted that although Enterprise’s long-term business fundamentals look good, the declining production of commodities owing to coronavirus-induced dented energy demand is likely to hurt short-term demand for the partnership’s midstream assets. Notably, lower natural gas pipeline transportation volumes and decreased propylene production volumes are hurting the partnership’s bottom line.
Importantly, although Enterprise has increased its distribution for 22 consecutive years, the partnership has been paying a lower distribution yield than the composite stocks belonging to the industry.
Stocks to Consider
Some better-ranked players in the energy space includeDiamondback Energy, Inc. (FANG - Free Report) , Matador Resources Company (MTDR - Free Report) and Pioneer Natural Resources Company (PXD - Free Report) . While Pioneer Natural carries a Zacks Rank #2 (Buy), Diamondback and Matador Resources sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Diamondback is likely to see earnings growth of 112.5% in 2021.
Matador is likely to see earnings growth of 300% in 2021.
Pioneer Natural is likely to see earnings growth of 429% in 2021.
Zacks Names “Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Here's Why You Should Retain Enterprise (EPD) Stock Now
Enterprise Products Partners LP (EPD - Free Report) has witnessed upward estimate revisions for 2021 and 2022 earnings in the past 30 days. In fact, four out of eight analysts have revised earnings estimates upward for 2021, while five of eight analysts have upwardly revised the same for 2022. Also, despite coronavirus-induced uncertainties, this leading midstream energy player’s stock price has improved 4.9% month to date, outperforming the industry’s 3.7% growth.
Factors Working in Favor
The partnership, currently carrying a Zacks Rank #3 (Hold), has a stable business model and is not significantly exposed to the pandemic-induced volatility in oil and gas prices. Enterprise generates stable fee-based revenues from the extensive pipeline network that spreads across roughly 50,000 miles, transporting natural gas, natural gas liquids (NGLs), crude oil petrochemicals and refined products. Importantly, the pipelines are connected to the key shale plays in the United States and nearly 90% of the refineries in the east of the Rockies.
The midstream infrastructure provider also has storage assets that have the capacity to store roughly 260 million barrels of NGL, petrochemical, refined products and crude oil. The assets can also store 14 billion cubic feet of natural gas. Moreover, Enterprise Products has $3.6 billion of major capital projects under construction that are likely to provide incremental fee-based revenues.
Also, the partnership’s balance sheet has lower debt exposure than the composite stocks belonging to the industry. Its debt to capitalization ratio of 0.54 is lower than the industry’s 0.59. In fact, the ratio has persistently been lower than the stocks belonging to the industry over the past few years. Moreover, the partnership’s long-term midstream contracts — which depict a stable business model — reflect its strong capability to pay off $29.9 billion of total debt principal outstanding as of Dec 31, 2020.
Risks
It is to be noted that although Enterprise’s long-term business fundamentals look good, the declining production of commodities owing to coronavirus-induced dented energy demand is likely to hurt short-term demand for the partnership’s midstream assets. Notably, lower natural gas pipeline transportation volumes and decreased propylene production volumes are hurting the partnership’s bottom line.
Importantly, although Enterprise has increased its distribution for 22 consecutive years, the partnership has been paying a lower distribution yield than the composite stocks belonging to the industry.
Stocks to Consider
Some better-ranked players in the energy space includeDiamondback Energy, Inc. (FANG - Free Report) , Matador Resources Company (MTDR - Free Report) and Pioneer Natural Resources Company (PXD - Free Report) . While Pioneer Natural carries a Zacks Rank #2 (Buy), Diamondback and Matador Resources sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Diamondback is likely to see earnings growth of 112.5% in 2021.
Matador is likely to see earnings growth of 300% in 2021.
Pioneer Natural is likely to see earnings growth of 429% in 2021.
Zacks Names “Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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