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Why Income Investors Should Keep an Eye on Enterprise Products
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Key Takeaways
EPD's vast pipeline network generates steady, fee-based revenue across energy commodities.
Enterprise Products has raised distributions for 27 straight years, returning billions to investors.
EPD's project backlog supports future cash flows; units gained 11.8% and trade below industry valuation.
Enterprise Products Partners LP (EPD - Free Report) is a leading midstream player and therefore has a resilient business model. EPD has a pipeline network that spans more than 50,000 miles, transporting oil, natural gas, refined products and other commodities. The partnership generates stable fee-based revenues from the midstream assets as the assets are booked by shippers for a long term.
Due to the resilience of its business model, the partnership has been able to return capital to unitholders on an ongoing basis. Since its IPO, Enterprise Products has returned billions of dollars to unitholders through both repurchases and distributions. Also, EPD has increased distributions for 27 consecutive years. Thus, the partnership has successfully kept cash flow steady at all business cycles.
Investors should know that Enterprise Products has a backlog of key capital projects valued in billions that are currently under construction. The midstream company has secured additional cash flows, further protecting future distribution payments. Thus, income investors should keep an eye on the stock.
KMI & ENB Also Focus on Returning Shareholders’ Capital
Kinder Morgan Inc. (KMI - Free Report) and Enbridge Inc. (ENB - Free Report) are two leading midstream companies, backed by stable business models. Both KMI and ENB have predictable cash flows that are supported by fee-based revenues. For the last nine consecutive years, KMI has increased its dividend payments.
ENB has rewarded shareholders with $38 billion over the past five years. In the next five years, ENB has a plan of returning $40 billion to $45 billion in the coming five years.
EPD’s Price Performance, Valuation & Estimates
Units of EPD have gained 11.8% over the past year compared with the 7.7% improvement 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 11.61X. This is below the broader industry average of 12.10X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2026 earnings has seen upward earnings estimate revisions over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Why Income Investors Should Keep an Eye on Enterprise Products
Key Takeaways
Enterprise Products Partners LP (EPD - Free Report) is a leading midstream player and therefore has a resilient business model. EPD has a pipeline network that spans more than 50,000 miles, transporting oil, natural gas, refined products and other commodities. The partnership generates stable fee-based revenues from the midstream assets as the assets are booked by shippers for a long term.
Due to the resilience of its business model, the partnership has been able to return capital to unitholders on an ongoing basis. Since its IPO, Enterprise Products has returned billions of dollars to unitholders through both repurchases and distributions. Also, EPD has increased distributions for 27 consecutive years. Thus, the partnership has successfully kept cash flow steady at all business cycles.
Investors should know that Enterprise Products has a backlog of key capital projects valued in billions that are currently under construction. The midstream company has secured additional cash flows, further protecting future distribution payments. Thus, income investors should keep an eye on the stock.
KMI & ENB Also Focus on Returning Shareholders’ Capital
Kinder Morgan Inc. (KMI - Free Report) and Enbridge Inc. (ENB - Free Report) are two leading midstream companies, backed by stable business models. Both KMI and ENB have predictable cash flows that are supported by fee-based revenues. For the last nine consecutive years, KMI has increased its dividend payments.
ENB has rewarded shareholders with $38 billion over the past five years. In the next five years, ENB has a plan of returning $40 billion to $45 billion in the coming five years.
EPD’s Price Performance, Valuation & Estimates
Units of EPD have gained 11.8% over the past year compared with the 7.7% improvement of the composite stocks belonging to the industry.
From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 11.61X. This is below the broader industry average of 12.10X.
The Zacks Consensus Estimate for EPD’s 2026 earnings has seen upward earnings estimate revisions over the past 30 days.
Enterprise Products currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.