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Can EPD Deliver Strong Cash Flow Amid Inflation Pressure?
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Key Takeaways
EPD generates stable cash flow via long-term, fee-based contracts from its vast midstream assets.
Enterprise Products has 90% inflation-protected contracts, supporting pricing power and stability.
EPD invests in growth projects set for 2026, enhancing future cash flow and income potential.
Enterprise Products Partners L.P. (EPD - Free Report) generates revenues by securing fee-based contracts with customers for its diverse midstream assets. The partnership boasts a massive pipeline network exceeding 50,000 miles and maintains more than 300 million barrels of liquids storage capacity. Using its pipeline network and liquids storage capacity, EPD transports and stores oil, natural gas and other energy products between producers and consumers.
Escalating tensions in the Middle East have caused a surge in oil prices, prompting concerns over rising inflation. However, EPD is well protected, as shippers book capacity on its midstream assets under long-term contracts that are mostly inflation-protected. As of Dec. 31, 2025, 90% of long-term contracts were inflation protected, enabling the partnership to raise fees to offset inflation-led higher costs and generate enhanced predictable cash flow.
EPD continues to strengthen its asset portfolio via strategic acquisitions and growth projects to enhance future cash flow. The partnership has invested billions in various growth projects, most of which are expected to come online by 2026. Supported by its inflation-resilient business model and enhanced cash flows from expansion projects, EPD stands out as an attractive option for income investors.
Do KMI & ENB Have Stable Business Models Like EPD?
Two other players in the midstream space are Kinder Morgan Inc. (KMI - Free Report) and Enbridge Inc. (ENB - Free Report) . Kinder Morgan and Enbridge also generate stable, fee-based revenues by utilizing their assets for transportation under long-term contracts with shippers. Like EPD, KMI and ENB also boost their predictable cash flows through expansion projects, thereby bringing stability to their business models.
EPD’s Price Performance, Valuation & Estimates
EPD shares have gained 28.9% over the past year compared with the 20.1% improvement registered by 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 11.7X, below the broader industry average of 12.00X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2026 earnings has remained unchanged over the past seven days.
View the Zacks #1 Rank List
Image: Bigstock
Can EPD Deliver Strong Cash Flow Amid Inflation Pressure?
Key Takeaways
Enterprise Products Partners L.P. (EPD - Free Report) generates revenues by securing fee-based contracts with customers for its diverse midstream assets. The partnership boasts a massive pipeline network exceeding 50,000 miles and maintains more than 300 million barrels of liquids storage capacity. Using its pipeline network and liquids storage capacity, EPD transports and stores oil, natural gas and other energy products between producers and consumers.
Escalating tensions in the Middle East have caused a surge in oil prices, prompting concerns over rising inflation. However, EPD is well protected, as shippers book capacity on its midstream assets under long-term contracts that are mostly inflation-protected. As of Dec. 31, 2025, 90% of long-term contracts were inflation protected, enabling the partnership to raise fees to offset inflation-led higher costs and generate enhanced predictable cash flow.
EPD continues to strengthen its asset portfolio via strategic acquisitions and growth projects to enhance future cash flow. The partnership has invested billions in various growth projects, most of which are expected to come online by 2026. Supported by its inflation-resilient business model and enhanced cash flows from expansion projects, EPD stands out as an attractive option for income investors.
Do KMI & ENB Have Stable Business Models Like EPD?
Two other players in the midstream space are Kinder Morgan Inc. (KMI - Free Report) and Enbridge Inc. (ENB - Free Report) . Kinder Morgan and Enbridge also generate stable, fee-based revenues by utilizing their assets for transportation under long-term contracts with shippers. Like EPD, KMI and ENB also boost their predictable cash flows through expansion projects, thereby bringing stability to their business models.
EPD’s Price Performance, Valuation & Estimates
EPD shares have gained 28.9% over the past year compared with the 20.1% improvement registered by 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 11.7X, below the broader industry average of 12.00X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2026 earnings has remained unchanged over the past seven days.
Image Source: Zacks Investment Research
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.