This Nearly 7%-Yielding Dividend Stock Is About to Hit a Growth Spurt

Core Viewpoint - Enterprise Products Partners is poised for significant growth with approximately $6 billion in organic growth capital projects set to enter commercial service in the latter half of the year, enhancing its income and supporting its long-standing distribution increase streak [1][8]. Financial Performance - In the second quarter, Enterprise Products Partners generated $1.9 billion in distributable cash flow, marking a 7% increase year-over-year, which is an acceleration from the 5% increase in the first quarter [4]. - The company achieved record operational metrics despite facing macroeconomic and geopolitical challenges, including record volumes in gas processing, gas pipelines, crude oil pipelines, and refined product and petrochemical pipelines [5]. Growth Initiatives - The company has completed several growth capital projects, including the acquisition of Pinon Midstream and assets from Western Midstream, as well as the commissioning of two new gas processing plants in the Permian Basin [6][9]. - Additional growth projects are expected to come online, including the Neches River Terminal and the Bahia pipeline, with further expansions planned for 2026 [10][11]. Financial Flexibility - Enterprise Products Partners is projected to generate $2 billion in additional free cash flow next year, with a reduction in growth capital spending from $4 billion-$4.5 billion this year to $2 billion-$2.5 billion in 2026, indicating strong financial flexibility for future investments [12]. - The company maintains the strongest balance sheet in the midstream sector, positioning it well for further growth opportunities [12]. Distribution Growth - The company has a 26-year history of increasing its distribution, with a 3.8% increase over the past year, supported by visible earnings growth from new assets and a robust financial position, suggesting further distribution increases are likely [13].