[Enterprise Reports Second Quarter 2025 Earnings](index=1&type=section&id=Enterprise%20Reports%20Second%20Quarter%202025%20Earnings) [Second Quarter 2025 Financial and Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operational%20Highlights) Enterprise reported stable net income of $1.4 billion, 7% DCF growth to $1.9 billion, and record operational volumes in Q2 2025 Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income (Common Unitholders) | $1.4 billion | $1.4 billion | 0% | | Diluted EPS | $0.66 | $0.64 | +3.1% | | Distributable Cash Flow (DCF) | $1.9 billion | $1.8 billion | +7% | | Adjusted CFFO | $2.1 billion | $2.1 billion | 0% | - Distributions declared for Q2 2025 increased by **3.8%** year-over-year to **$0.545 per common unit**[4](index=4&type=chunk) - DCF covered this distribution **1.6 times**, resulting in **$748 million** of retained DCF[4](index=4&type=chunk) Q2 2025 Volume Highlights | Volume Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Natural gas pipeline volumes (TBtus/d) | 20.4 | 18.7 | +9.1% | | Crude oil pipeline volumes (million BPD) | 2.6 | 2.5 | +4.0% | | Natural gas processing plant inlet volumes (Bcf/d) | 7.8 | 7.5 | +4.0% | | NGL pipeline transportation volumes (million BPD) | 4.6 | 4.3 | +5.1% | - Total capital investments in Q2 2025 were **$1.3 billion**, including **$1.2 billion** for growth projects[5](index=5&type=chunk)[6](index=6&type=chunk) - The company repurchased approximately **$110 million** of its common units[5](index=5&type=chunk)[6](index=6&type=chunk) - As of June 30, 2025, total debt principal was **$33.1 billion**, and the company had consolidated liquidity of approximately **$5.1 billion**[7](index=7&type=chunk) [Management Commentary and Outlook](index=2&type=section&id=Management%20Commentary%20and%20Outlook) Management reported solid Q2 earnings and cash flow, with $6 billion in organic growth projects expected online in H2 2025 - CEO A. J. "Jim" Teague noted that the company delivered solid earnings and cash flow despite a seasonally weaker quarter with macroeconomic, geopolitical, and commodity price headwinds[13](index=13&type=chunk) - The company has approximately **$6 billion** of organic growth capital projects slated to enter commercial service in the second half of 2025[14](index=14&type=chunk) - Key growth projects coming online include: - Two new **300 MMcf/d** gas processing facilities in the Permian Basin (Mentone West 1 and Orion)[14](index=14&type=chunk)[15](index=15&type=chunk) - The Neches River Terminal (NRT) for hydrocarbon exports, with a dock and ethane refrigeration train commissioned in July[14](index=14&type=chunk)[15](index=15&type=chunk) - Frac 14 and the Bahia pipeline, expected to be commissioned in Q4 2025[14](index=14&type=chunk)[15](index=15&type=chunk) [Review of Second Quarter 2025 Results by Segment](index=4&type=section&id=Review%20of%20Second%20Quarter%202025%20Results) Total gross operating margin increased to $2.5 billion, driven by Natural Gas Pipelines & Services, offsetting declines in other segments Gross Operating Margin by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | NGL Pipelines & Services | $1,297 | $1,325 | -2.1% | | Crude Oil Pipelines & Services | $403 | $417 | -3.4% | | Natural Gas Pipelines & Services | $417 | $293 | +42.3% | | Petrochemical & Refined Products Services | $354 | $392 | -9.7% | | **Total Segment Gross Operating Margin** | **$2,471** | **$2,427** | **+1.8%** | [NGL Pipelines & Services](index=4&type=section&id=NGL%20Pipelines%20%26%20Services) NGL Pipelines & Services gross operating margin remained flat at $1.3 billion, with processing declines offsetting pipeline gains - Natural gas processing GOM decreased by **$45 million** to **$341 million**, primarily due to lower margins and a **$16 million** MTM loss, despite record fee-based processing volumes of **7.3 Bcf/d**[17](index=17&type=chunk) - NGL pipelines and storage GOM increased by **$31 million** to **$732 million**, driven by a **5%** increase in pipeline volumes and an **8%** increase in marine terminal volumes[18](index=18&type=chunk) - NGL fractionation GOM decreased by **$14 million** to **$224 million** due to lower ancillary service revenues and higher operating costs, while fractionation volumes remained flat[20](index=20&type=chunk) [Crude Oil Pipelines & Services](index=5&type=section&id=Crude%20Oil%20Pipelines%20%26%20Services) Crude Oil Pipelines & Services gross operating margin decreased to $403 million due to lower marketing sales and marine terminal volumes - The segment's GOM decreased by a net **$14 million**, primarily due to lower sales volumes from marketing activities[20](index=20&type=chunk) - Total crude oil pipeline volumes were a record **2.6 million BPD**, up from **2.5 million BPD** in Q2 2024[20](index=20&type=chunk) - However, marine terminal volumes fell to **811 MBPD** from **977 MBPD**[20](index=20&type=chunk) [Natural Gas Pipelines & Services](index=5&type=section&id=Natural%20Gas%20Pipelines%20%26%20Services) Natural Gas Pipelines & Services gross operating margin surged 42% to $417 million, driven by marketing gains and record pipeline volumes - Gross operating margin from the natural gas marketing business increased by **$75 million**, primarily due to a **$55 million** increase in MTM earnings and higher sales margins[22](index=22&type=chunk) - Permian natural gas gathering systems reported a **$24 million** net increase in GOM due to a **1.0 TBtus/d** increase in gathering volumes[22](index=22&type=chunk) - The Texas Intrastate System's GOM increased by **$21 million** due to higher transportation-related revenues as pipeline volumes grew[22](index=22&type=chunk) [Petrochemical & Refined Products Services](index=6&type=section&id=Petrochemical%20%26%20Refined%20Products%20Services) Petrochemical & Refined Products Services gross operating margin declined to $354 million, primarily due to lower octane enhancement margins - Gross operating margin from octane enhancement and related operations decreased by **$49 million** due to lower average sales margins[27](index=27&type=chunk) - Propylene production and related activities reported a **$4 million** increase in GOM, driven by an **11 MBPD** increase in production volumes as PDH facilities had significantly less downtime compared to Q2 2024[27](index=27&type=chunk) - Total segment pipeline volumes reached a record **1.0 million BPD**, an increase from **960 MBPD** in Q2 2024[23](index=23&type=chunk) [Financial Statements and Non-GAAP Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliations) This section presents unaudited Q2 2025 financial statements, including GAAP and non-GAAP reconciliations for key metrics Condensed Statements of Consolidated Operations (Unaudited, $ in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $11,363 | $13,483 | | Operating Income | $1,795 | $1,765 | | Net Income | $1,454 | $1,422 | | Net Income Attributable to Common Unitholders | $1,435 | $1,405 | Key Non-GAAP Financial Measures (Unaudited, $ in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Non-GAAP Distributable Cash Flow (DCF) | $1,939 | $1,812 | | Non-GAAP Adjusted EBITDA | $2,408 | $2,389 | | Non-GAAP Adjusted Cash flow from operations | $2,111 | $2,065 | | Non-GAAP Adjusted Free Cash Flow | $812 | $814 | - The report provides detailed reconciliations for non-GAAP measures to their most directly comparable GAAP measures, including DCF to Net Cash Flow Provided by Operating Activities, and Gross Operating Margin to Operating Income[24](index=24&type=chunk)[47](index=47&type=chunk)[55](index=55&type=chunk) Average Commodity Prices | Commodity | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | WTI Crude Oil ($/barrel) | $63.87 | $80.57 | | Natural Gas ($/MMBtu) | $3.44 | $1.89 | | Weighted-average NGL ($/gallon) | $0.58 | $0.59 |

Earnings Report - Enterprise Products Partners L.P. is set to release its second-quarter earnings results on July 28, with analysts expecting earnings of 64 cents per share, unchanged from the previous year [1] - Projected quarterly revenue is $14.18 billion, an increase from $13.48 billion a year earlier [1] Recent Financial Activity - On June 17, Enterprise priced its $2.0 billion aggregate principal amount of senior notes [2] - The company's shares fell by 0.8%, closing at $31.55 on the preceding Friday [2] Analyst Ratings - Mizuho analyst Gabriel Moreen maintained an Outperform rating but reduced the price target from $39 to $38 [4] - Barclays analyst Theresa Chen kept an Overweight rating and lowered the price target from $36 to $35 [4] - Citigroup analyst Spiro Dounis maintained a Buy rating and cut the price target from $37 to $35 [4] - JP Morgan analyst Jeremy Tonet maintained an Overweight rating and increased the price target from $37 to $38 [4] - Morgan Stanley analyst Robert Kad maintained an Equal-Weight rating and raised the price target from $36 to $38 [4]

Market Overview - The S&P 500 index has experienced significant volatility in 2025, peaking in February and briefly entering correction territory in April, but has since achieved a record high [1][2] - Current trading levels for the S&P 500 are over 25 times earnings, with U.S. stocks representing 65% of global stocks, indicating historically high valuations [2] Investment Strategy - Tom Gardner, CEO of The Motley Fool, suggests that investors can still outperform the market by focusing on areas that are currently overlooked [3][5] - Emphasis is placed on seeking dividend-paying, defensive, and value stocks as a more cautious investment approach in the current high valuation environment [5][6] Stock Recommendations - **Enterprise Products Partners (EPD)**: A leading midstream energy company with over 50,000 miles of pipeline, offering a 6.9% dividend yield. The company has a strong track record of increasing dividends for 26 consecutive years and is expected to generate steady cash flows due to long-term contracts with inflation escalation clauses [9][11] - **Brookfield Infrastructure (BIPC/BIP)**: This company focuses on defensive assets such as utilities and railroads, with 85% of its funds from operations being contracted or regulated. It has achieved a 15% CAGR in funds from operations per unit over the past 15 years and targets over 10% FFO growth and 5% to 9% annual dividend growth [12][13] - **Nucor (NUE)**: The largest steel producer in North America, known for its cost-efficient electric arc furnaces and vertical integration. Nucor has increased its dividend for 52 consecutive years and is currently trading 30% below its all-time highs, presenting a potential value opportunity [14][17]

Group 1 - Enterprise Products Partners (EPD) is set to release its second quarter earnings on July 28, with expectations for significant year-over-year growth in earnings [1] - Analysts anticipate a slight decline in earnings on a quarter-over-quarter basis for the company [1] - EPD is recognized as one of the largest companies in its sector, indicating its substantial market presence [1]

Core Insights - Enbridge Inc. (ENB) and Enterprise Products Partners (EPD) are midstream energy companies with business models that reduce vulnerability to commodity price volatility [1] - Over the past year, ENB has outperformed EPD with a growth of 33.2% compared to EPD's 16.4% [2] - A deeper analysis of business fundamentals and long-term outlook is necessary to assess the investment case for both companies [2] Business Model and Financial Stability - Enbridge's cash flows are more insulated due to 98% of its EBITDA being supported by regulated or take-or-pay contracts, allowing for automatic price increases [4][6] - More than 80% of Enbridge's profits come from activities that can adjust prices or fees, providing stability in high-inflation environments [4] - Enterprise Products' earnings are more dependent on the volume of oil and gas transported, making it more vulnerable to global commodity demand [5] Investment Focus and Growth Prospects - Enbridge is investing significantly in renewable energy projects, including wind and solar, aligning with global trends towards cleaner energy [7] - Enterprise Products remains focused on fossil fuels and petrochemicals, which may diminish its appeal to investors seeking cleaner alternatives [8] - Enbridge's current EV/EBITDA ratio is 15.13, higher than EPD's 10.24, indicating a premium valuation for ENB [9] Earnings Estimates and Market Position - Enbridge has seen upward revisions in earnings estimates for 2025, contrasting with EPD's performance [10] - Current earnings estimates for Enbridge show stability, with projections for the current year at 2.14 [11] - Overall, Enbridge is positioned as a stronger investment option compared to Enterprise Products, with a Zacks Rank of 2 (Buy) versus EPD's 4 (Sell) [11]

Core Viewpoint - Enterprise Products Partners LP (EPD) is expected to report second-quarter 2025 results on July 28, with earnings estimated at 65 cents per share, reflecting a 1.6% increase year-over-year, and revenues projected at $14.2 billion, indicating a 5.4% rise from the previous year [1][6]. Financial Performance - The Zacks Consensus Estimate for EPD's second-quarter earnings is 65 cents per share, with revenues expected to reach $14.2 billion [1][6]. - EPD has beaten earnings estimates in one of the last four quarters and missed in three, with an average negative surprise of 0.8% [2]. - The partnership has an Earnings ESP of +0.90% but currently holds a Zacks Rank 4 (Sell), indicating a lower likelihood of an earnings beat this time [3]. Business Operations - EPD is a leading provider of midstream services in North America, with a pipeline network of 50,000 miles, transporting natural gas, NGLs, crude oil, refined products, and petrochemicals [4]. - The company is expected to generate stable fee-based revenues and cash flows, supported by a storage capacity exceeding 300 million barrels for various products [4][6]. - The gross operating margin for EPD's NGL Pipelines & Services segment is estimated at $1,416.5 million, up from $1,325 million a year ago [5][6]. Market Position - EPD's stock has increased by 13.8% over the past year, slightly outperforming the industry average of 12.9% [12]. - The current trailing 12-month EV/EBITDA ratio for EPD is 10.18, compared to the industry average of 11.51, indicating that EPD is trading at a discount [15]. Investment Strategy - EPD is investing $7.6 billion in growth projects, including new pipelines and gas processing plants, with a significant portion of its 2026 spending already allocated to approved projects [17]. - The company faces risks associated with its high spending commitments, particularly if market conditions deteriorate, potentially leading to lower-than-expected returns [18].

Core Viewpoint - Enterprise Products Partners (EPD) is expected to report quarterly earnings of $0.65 per share, a 1.6% increase year-over-year, with revenues projected at $14.21 billion, reflecting a 5.4% year-over-year growth [1]. Earnings Estimates - The consensus EPS estimate has been revised downward by 1.4% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Key Metrics Projections - Analysts estimate 'NGL Pipelines & Services net - NGL fractionation volumes per day' at 1,643.35 thousand barrels, up from 1,629.00 thousand barrels year-over-year [5]. - The estimate for 'NGL Pipelines & Services net - Fee-based natural gas processing per day' is projected at 7,193.40 thousand barrels, compared to 6,514.00 thousand barrels last year [6]. - 'NGL Pipelines & Services net - NGL pipeline transportation volumes per day' is expected to reach 4,655.69 thousand barrels, an increase from 4,264.00 thousand barrels year-over-year [6]. - 'Natural Gas Pipelines & Services net - Natural gas transportation volumes per day' are estimated at 20,257 billion British thermal units, up from 18,344 billion British thermal units last year [7]. - The consensus for 'Petrochemical Services net - Butane isomerization volumes per day' is 117.36 thousand barrels, slightly down from 119.00 thousand barrels year-over-year [8]. - 'Petrochemical Services net - Propylene fractionation volumes per day' is projected at 111.91 thousand barrels, an increase from 96.00 thousand barrels last year [8]. - 'Petrochemical Services net - Octane enhancement and related plant sales volumes per day' is expected to be 39.09 thousand barrels, compared to 39.00 thousand barrels year-over-year [9]. - 'NGL Pipelines & Services net - Equity NGL production per day' is estimated at 228.53 thousand barrels, up from 217.00 thousand barrels last year [10]. - 'Gross operating margin- NGL Pipelines & Services' is forecasted to reach $1.42 billion, compared to $1.33 billion in the same quarter last year [10]. - 'Gross operating margin- Crude Oil Pipelines & Services' is expected at $384.81 million, down from $417.00 million year-over-year [11]. - 'Gross operating margin- Natural Gas Pipelines & Services' is projected at $335.23 million, an increase from $293.00 million last year [11]. - 'Gross operating margin- Petrochemical & Refined Products Services' is estimated at $371.52 million, compared to $392.00 million last year [12]. Stock Performance - Shares of Enterprise Products have increased by 2.4% over the past month, while the Zacks S&P 500 composite has moved up by 5.7% [12].

Core Viewpoint - Ultrahigh-yield dividend stocks can provide dependable income despite common concerns about their sustainability Group 1: Enbridge - Enbridge offers a forward dividend yield of 6.06% and has increased its dividend for 30 consecutive years [3][4] - The company transports approximately 30% of North America's crude oil and 40% of U.S. crude oil imports, along with one-fifth of the natural gas used in the U.S. [4] - Over 98% of Enbridge's EBITDA is regulated or part of take-or-pay contracts, with around 80% protected against inflation [5] - The company expects to grow its business by about 5% per year on average through the end of the decade [6] Group 2: Enterprise Products Partners - Enterprise Products Partners has a forward distribution yield of 7% and a 26-year streak of distribution hikes [7][8] - The company operates over 50,000 miles of pipeline, focusing on natural gas liquids (NGLs) [8] - Enterprise has generated dependable cash flow through various economic challenges, including the Great Recession and the COVID-19 pandemic [9] - The demand for U.S. natural gas, NGLs, and oil is expected to grow, with the company well-positioned due to its pipelines and $7.6 billion in capital projects under construction [10] Group 3: Prudential Financial - Prudential Financial offers a forward dividend yield of 5.29% and has increased its dividend for 17 consecutive years [11] - The company is known for its insurance operations and has a significant presence in the retirement business, providing revenue diversification [12] - Prudential's stock is currently trading at a forward price-to-earnings ratio of 7.94, making it an attractive option for income investors [13]

Group 1 - Enterprise Products Partners (NYSE: EPD) is identified as a leading Master Limited Partnership (MLP) and considered a "best of breed" pick in its sector due to its extensive pipeline network and focus on transporting, processing, and storing [1] - The investment strategy employed by the company has resulted in a near 5-star rating on Tipranks.com and has garnered over 9,000 followers on Seeking Alpha, indicating a strong reputation among investors [1] - The analyst has disclosed a beneficial long position in EPD shares, indicating confidence in the company's performance and potential for growth [1]

Core Insights - Dividend investing is a popular strategy among retail investors seeking stability and passive income, with a focus on long-term buy-and-hold approaches for companies like Coca-Cola and Johnson & Johnson [1] - Investors typically look for dividend yields in the 2-3% range and payout ratios below 80% as indicators of sustainable dividend payments [2] Group 1: Enterprise Products Partners (EPD) - EPD offers a high dividend yield of 6.85% with an annual dividend of $2.14 and a dividend payout ratio of 80.15%, supported by a 28-year track record of dividend increases [4][5] - The company has a unique buying opportunity due to a recent share price dip, and analysts expect earnings growth above 5% in the coming year, with a consensus price target suggesting a potential rise of 15% or more [6] - EPD's high dividend yield is likely to become more attractive if the Federal Reserve lowers interest rates [5] Group 2: United Parcel Service (UPS) - UPS has a dividend yield of 6.63% and an annual dividend of $6.56, with a 16-year history of dividend increases, although its payout ratio is high at 95.63% [7][9] - The company is focusing on improving operational efficiency and profitability, which may help offset concerns regarding its elevated payout ratio [8] - Analysts predict UPS will experience earnings growth of 10.3% in the coming quarters, with potential capital growth of nearly 20% [10] Group 3: ONEOK Inc. (OKE) - OKE has a dividend yield of 5.12% and an annual dividend of $4.12, with a payout ratio of 80.47% and a 3-year track record of dividend increases [11][13] - The company is expected to improve its position through new construction that will expand its infrastructure, despite a year-to-date decline of over 21% [12] - Analysts are optimistic about OKE, predicting earnings growth of more than 17% in the coming quarters, with a price target suggesting nearly 29% upside potential [14]