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Is Enterprise Product's Growing DCF a Catalyst for Long-Term Gains?
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Key Takeaways
EPD grew DCF 4% y/y to $8.1B for the 12 months ending June 2025.
The 2Q25 distribution rose 3.8% to 54.5 cents per unit, supported by a 57% payout ratio.
EPD repurchased $3.9M in units over 12 months, reinforcing its long-term value creation strategy.
Enterprise Products Partners (EPD - Free Report) has continued to showcase the strength of its business model through consistent growth in distributable cash flow (DCF). It is a vital metric for master limited partnerships, as it indicates the cash generated from operations that is available to be distributed to unitholders.
In 2024, the partnership reported a total DCF of $7.8 billion. In contrast, for the 12 months ending June 30, 2025, the DCF increased 4% year over year to $8.1 billion. This upward trend reflects the partnership’s impressive financial discipline, given its history of weathering major economic disruptions like the 2008 financial crisis, the oil price collapse of 2014-2016, and the coronavirus pandemic.
This highlights the stability of EPD’s fee-based infrastructure and its ability to generate reliable cash flows in volatile environments. The increase in DCF has translated into stronger returns for investors, with the second-quarter 2025 distribution rising 3.8% to 54.5 cents per unit from the previous year.
EPD has also deployed $110 million toward unit repurchases in the second quarter, bringing its 12-month total to $309 million. These unitholder-friendly moves are backed by a conservative 57% payout ratio based on adjusted cash flow from operations.
The momentum in DCF signals not just short-term income growth but long-term value creation. The partnership’s record of 27 consecutive years of distribution growth reflects a resilient and dependable income stream, even amid market volatility. For investors, this indicates increasing distributions and capital appreciation through buybacks to deliver dependable returns over the long haul.
Are ET & DKL’s Project Pipelines Driving Growth?
Energy Transfer (ET - Free Report) achieved record-breaking results in DCF. Energy Transfer’s DCF rose 10% year over year to a new high of $8.4 billion in 2024. In the first quarter of 2025, the partnership reported DCF attributable to partners of $2.31 billion, underscoring its robust operational and financial performance.
Similarly, Delek Logistics Partners, LP (DKL - Free Report) demonstrated a solid cash flow performance. In the fourth quarter of 2024, the partnership posted a DCF of $66.7 million, with an adjusted figure of $69.5 million. It also reported a DCF coverage ratio of 1.13X and an adjusted coverage ratio of 1.17X, both indicating that the partnership’s distributions to unitholders were well-supported by operational cash flows.
In first-quarter 2025, Delek reported an adjusted DCF of $75.1 million compared with $68 million in the first quarter of 2024, reinforcing the strength and sustainability of its cash distributions.
EPD’s Price Performance, Valuation & Estimates
EPD units have gained 10.2% over the past year, outpacing 9.4% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.17X. This is below the broader industry average of 11.63X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2025 earnings has been revised downward over the past 30 days.
Image: Bigstock
Is Enterprise Product's Growing DCF a Catalyst for Long-Term Gains?
Key Takeaways
Enterprise Products Partners (EPD - Free Report) has continued to showcase the strength of its business model through consistent growth in distributable cash flow (DCF). It is a vital metric for master limited partnerships, as it indicates the cash generated from operations that is available to be distributed to unitholders.
In 2024, the partnership reported a total DCF of $7.8 billion. In contrast, for the 12 months ending June 30, 2025, the DCF increased 4% year over year to $8.1 billion. This upward trend reflects the partnership’s impressive financial discipline, given its history of weathering major economic disruptions like the 2008 financial crisis, the oil price collapse of 2014-2016, and the coronavirus pandemic.
This highlights the stability of EPD’s fee-based infrastructure and its ability to generate reliable cash flows in volatile environments. The increase in DCF has translated into stronger returns for investors, with the second-quarter 2025 distribution rising 3.8% to 54.5 cents per unit from the previous year.
EPD has also deployed $110 million toward unit repurchases in the second quarter, bringing its 12-month total to $309 million. These unitholder-friendly moves are backed by a conservative 57% payout ratio based on adjusted cash flow from operations.
The momentum in DCF signals not just short-term income growth but long-term value creation. The partnership’s record of 27 consecutive years of distribution growth reflects a resilient and dependable income stream, even amid market volatility. For investors, this indicates increasing distributions and capital appreciation through buybacks to deliver dependable returns over the long haul.
Are ET & DKL’s Project Pipelines Driving Growth?
Energy Transfer (ET - Free Report) achieved record-breaking results in DCF. Energy Transfer’s DCF rose 10% year over year to a new high of $8.4 billion in 2024. In the first quarter of 2025, the partnership reported DCF attributable to partners of $2.31 billion, underscoring its robust operational and financial performance.
Similarly, Delek Logistics Partners, LP (DKL - Free Report) demonstrated a solid cash flow performance. In the fourth quarter of 2024, the partnership posted a DCF of $66.7 million, with an adjusted figure of $69.5 million. It also reported a DCF coverage ratio of 1.13X and an adjusted coverage ratio of 1.17X, both indicating that the partnership’s distributions to unitholders were well-supported by operational cash flows.
In first-quarter 2025, Delek reported an adjusted DCF of $75.1 million compared with $68 million in the first quarter of 2024, reinforcing the strength and sustainability of its cash distributions.
EPD’s Price Performance, Valuation & Estimates
EPD units have gained 10.2% over the past year, outpacing 9.4% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.17X. This is below the broader industry average of 11.63X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2025 earnings has been revised downward over the past 30 days.
Image Source: Zacks Investment Research
EPD currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.