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Can Enterprise Products' Expanding DCF Drive Long-Term Upside?
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Key Takeaways
EPD's Q2 distributable cash flow rose 7% y/y to $1.94B, with operational DCF up to $1.91B.
Strong cash flow supported a 3.8% dividend hike and $748M reinvested into growth projects.
Fee-based revenues drive more than 80% of the gross margin, reducing volatility and boosting predictability.
Enterprise Products Partners (EPD - Free Report) continues to strengthen its business model through steady growth in distributable cash flow (DCF), a key metric for master limited partnerships. In the second quarter of 2025, the partnership reported DCF of $1.94 billion, up 7% from $1.81 billion in the prior year.
Operational DCF, excluding asset sales and derivative monetization, rose to $1.91 billion from $1.81 billion. This consistent expansion underscores the partnership’s ability to generate reliable cash from operations.
Enterprise Products’ strong cash flow provided 1.6 times coverage of its declared distribution of 54.5 cents per unit, which itself marked a 3.8% year-over-year increase. The excess cash flow allowed the partnership to retain $748 million for reinvestment in growth projects, ensuring the continued buildout of its integrated midstream platform while rewarding unitholders.
A major contributor to this stability is Enterprise Products’ fee-based revenue structure, with more than 80% of the gross operating margin derived from such activities. This reduces exposure to commodity price volatility and provides a predictable foundation for cash flow. The partnership’s long-standing commitment to investors is further evident in its 27 consecutive years of distribution increases, reflecting its resilience through economic cycles.
Looking ahead, Enterprise Products is well-positioned to sustain this momentum. Its combination of disciplined balance sheet management, consistent cash flow growth, and reinvestment in strategic projects supports near-term distributions and long-term value creation. This consistency in DCF growth reaffirms the strength and durability of Enterprise Products’ business strategy.
Are ET & DKL’s Growing DCF a Catalyst for Long-Term Gains?
Energy Transfer’s (ET - Free Report) DCF has demonstrated both growth and resilience over the past several years, rising from $5.7 billion in 2020 to $8.3 billion in 2024. In 2025, performance has been strong with $4.26 billion generated in the first six months of 2025, including $1.96 billion attributable to partners in the second quarter alone, reflecting the partnership’s consistent ability to produce reliable cash flows.
Delek Logistics Partners, LP (DKL - Free Report) is performing strongly, delivering $72.5 million adjusted distributable cash flow in the second quarter of 2025, with a solid 1.22X coverage ratio, supporting its 50th consecutive quarterly distribution increase to $1.115/unit and highlighting steady growth and financial resilience.
EPD’s Price Performance, Valuation & Estimates
EPD units have gained 7.9% over the past year, outpacing 2.2% 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 10.19X. This is below the broader industry average of 10.69X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2025 earnings has been revised downward over the past seven days.
Image: Bigstock
Can Enterprise Products' Expanding DCF Drive Long-Term Upside?
Key Takeaways
Enterprise Products Partners (EPD - Free Report) continues to strengthen its business model through steady growth in distributable cash flow (DCF), a key metric for master limited partnerships. In the second quarter of 2025, the partnership reported DCF of $1.94 billion, up 7% from $1.81 billion in the prior year.
Operational DCF, excluding asset sales and derivative monetization, rose to $1.91 billion from $1.81 billion. This consistent expansion underscores the partnership’s ability to generate reliable cash from operations.
Enterprise Products’ strong cash flow provided 1.6 times coverage of its declared distribution of 54.5 cents per unit, which itself marked a 3.8% year-over-year increase. The excess cash flow allowed the partnership to retain $748 million for reinvestment in growth projects, ensuring the continued buildout of its integrated midstream platform while rewarding unitholders.
A major contributor to this stability is Enterprise Products’ fee-based revenue structure, with more than 80% of the gross operating margin derived from such activities. This reduces exposure to commodity price volatility and provides a predictable foundation for cash flow. The partnership’s long-standing commitment to investors is further evident in its 27 consecutive years of distribution increases, reflecting its resilience through economic cycles.
Looking ahead, Enterprise Products is well-positioned to sustain this momentum. Its combination of disciplined balance sheet management, consistent cash flow growth, and reinvestment in strategic projects supports near-term distributions and long-term value creation. This consistency in DCF growth reaffirms the strength and durability of Enterprise Products’ business strategy.
Are ET & DKL’s Growing DCF a Catalyst for Long-Term Gains?
Energy Transfer’s (ET - Free Report) DCF has demonstrated both growth and resilience over the past several years, rising from $5.7 billion in 2020 to $8.3 billion in 2024. In 2025, performance has been strong with $4.26 billion generated in the first six months of 2025, including $1.96 billion attributable to partners in the second quarter alone, reflecting the partnership’s consistent ability to produce reliable cash flows.
Delek Logistics Partners, LP (DKL - Free Report) is performing strongly, delivering $72.5 million adjusted distributable cash flow in the second quarter of 2025, with a solid 1.22X coverage ratio, supporting its 50th consecutive quarterly distribution increase to $1.115/unit and highlighting steady growth and financial resilience.
EPD’s Price Performance, Valuation & Estimates
EPD units have gained 7.9% over the past year, outpacing 2.2% 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 10.19X. This is below the broader industry average of 10.69X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2025 earnings has been revised downward over the past seven 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.