ExxonMobil vs. EPD: Which Energy Stock Boasts Better Prospects?

Core Insights - Exxon Mobil Corporation (XOM) has outperformed Enterprise Products Partners LP (EPD) over the past year, with a gain of 24.4% compared to EPD's 5.2% [1] Group 1: Business Environment and Price Impact - The price of West Texas Intermediate (WTI) crude is currently around $60 per barrel, significantly lower than the previous year's levels, negatively impacting XOM's upstream business [4] - The U.S. Energy Information Administration projects a decline in WTI prices, with an average of $52.21 per barrel expected for 2026, down from $65.40 in 2025, which raises concerns about XOM's ability to maintain earnings from upstream operations [5] - EPD's midstream model is insulated from price fluctuations, generating stable, fee-based revenue, which is reflected in its higher EV/EBITDA ratio amid soft oil prices [5][12] Group 2: Business Models Comparison - XOM operates in advantageous areas such as the Permian Basin and offshore Guyana, but lower oil prices are likely to impact its profitability [6] - EPD's business model is resilient to low oil prices due to its extensive pipeline network of over 50,000 miles, allowing it to generate stable revenues regardless of commodity price volatility [8] - EPD has consistently returned capital to unitholders since its IPO, demonstrating the strength of its business model [9] Group 3: Financial Metrics and Valuation - XOM's debt-to-capitalization ratio stands at 13.6%, significantly lower than the industry average of 29.2%, providing it with a strong balance sheet to navigate challenging market conditions [10] - Investors are currently willing to pay a premium for EPD, as indicated by its trailing 12-month EV/EBITDA of 10.69X compared to XOM's 8.64X, suggesting a preference for EPD's stable midstream operations in the current market [12]