Enterprise Products' Distribution Yield Is More than 6%: Is it Lucrative?

Core Insights - Enterprise Products Partners LP (EPD) is a significant player in the midstream energy sector, with extensive pipeline assets exceeding 50,000 miles and liquid storage capacity over 300 thousand barrels, supported by stable fee-based revenues from long-term shipper contracts [1][2] Group 1: Business Model and Earnings - EPD's fee-based earnings are the primary contributor to its gross operating margin, indicating a highly predictable and stable business model [2] - The partnership has successfully increased its distribution for 27 consecutive years, showcasing its resilience [2] Group 2: Distribution Yield Comparison - EPD's current distribution yield is 6.79%, slightly below the industry average of 6.9%, but its three-year median yield of 7.22% surpasses the industry's 6.87% [3] - Competitors Kinder Morgan Inc. (KMI) and Enbridge Inc. (ENB) have lower current dividend yields of 4.2% and 5.6%, respectively, despite also having stable business models [4] Group 3: Price Performance and Valuation - EPD units have appreciated by 6.5% over the past year, contrasting with a 7.1% decline in the broader industry [5][6] - The current EV/EBITDA ratio for EPD is 10.61X, aligning with the industry average [8] Group 4: Earnings Estimates - The Zacks Consensus Estimate for EPD's 2025 earnings has experienced downward revisions in the past week [10]