Enterprise Products Partners LP (EPD) is the latest midstream company to strike a deal that will expand its natural gas gathering and processing footprint in the Permian. Enterprise will acquire Pinon Midstream in a $950 million deal expected to close in the fourth quarter of 2024.
Enterprise Products Partners is a cash cow in the midstream/pipeline space, with steady cash flows and low trading multiples. The company saw strong revenue and profit growth in the most recent quarter, with improvements in sales volumes and prices. Enterprise Products Partners has low leverage, attractive pricing, and a history of returning capital to shareholders, making it a solid 'buy'.
Enterprise Products Q2: Look Beyond The 7%+ Yield
EPD remains my top conviction pick for income-oriented investors. The stable business model, growth opportunities, and strong balance sheet suggest a double-digit upside might be ahead. EPD is trading at a relatively cheap valuation and is partially responsible for the well-covered, attractive 7.5% distribution.
Enterprise Products Partners is a large midstream company with a market cap of over $60 billion and a dividend yield of over 7%. The company has strong financials, with low leverage and high cash flow, supporting shareholder returns and growth capital investments. Despite being an MLP, the company's ability to generate substantial shareholder returns through dividends and investments makes it a valuable long-term investment.
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Enterprise Products Partners is a high-quality A-rated aristocrat with a 7.3% yield and 16% undervaluation, offering significant return potential. EPD is one of the few high-yield blue chips to keep up with the tech-dominated S&P this year, and it has plenty of room to run. EPD offers 23% upside potential in the next year, 70% in the next three years, 141% in the next five years, and 13% to 14% long-term return potential.
Enterprise reported steady Q2 results. The company has been increasing its growth capex, which should lead to stronger growth in the years ahead.
Natural gas liquids (NGL) production is a significant growth opportunity for Enterprise Products Partners (EPD). The midstream energy company has seen continued growth in natural gas and NGL production in the Permian.
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Enterprise Products Partners L.P. is a top 20 holding within my portfolio. The company has ample projects in its pipeline to keep delivering steady growth in the years ahead. Enterprise Products Partners' leverage ratio is squarely within its targeted range.
Enterprise Products Partners announced an expansion project at the Houston Ship Channel Export Facility due to strong demand from upcoming LNG projects. The company's advantage lies in existing port facilities. One of the highest financial strength ratings is another advantage. The company is also a dividend king.