Enterprise Products Partners L.P. (NYSE:EPD) is included among the 10 Best Recession Proof Dividend Stocks to Buy. Why Enterprise Products Partners (EPD) Stands Out Among Recession-Proof Dividend Stocks Enterprise Products Partners L.P. (NYSE:EPD) is a leading midstream energy company known for generating steady cash flow, even through difficult periods like the 2007–2009 financial crisis, the 2015–2017 oil price slump, and the COVID-19 downturn from 2020 to 2022. Founded in 1968, Enterprise Products Pa ...

Core Insights - Energy Transfer LP (ET) is currently trading above its 50-day simple moving average (SMA), indicating a bullish trend for the stock [1][7] - The company operates a vast network of pipelines across the United States and is focusing on expanding its capabilities to meet the growing demand for energy [1][10] - ET is a leading exporter of liquefied petroleum gas and is enhancing its natural gas liquids (NGL) export facilities to cater to increasing global demand [1][10] Price Performance - ET's stock closed at $17.46 on August 21, with a 1-year gain of 8.9%, outperforming the industry average of 2.7% [5] - The company's trailing 12-month Enterprise Value-to-EBITDA ratio is 9.29x, which is below the industry average of 10.65x, suggesting that ET is undervalued compared to its peers [14] Financial Strength and Growth - Nearly 90% of ET's earnings are derived from fee-based contracts, providing stable cash flows and insulation from commodity price fluctuations [7][13] - The Zacks Consensus Estimate indicates year-over-year earnings growth of 9.38% for 2025 and 10.71% for 2026 [17] - ET's current quarterly cash distribution rate is 33 cents per common unit, with management having raised distribution rates 16 times in the past five years [19] Operational Efficiency - The company invested $2.4 billion in the first half of 2025 and plans to invest a total of $5 billion for the year to enhance its infrastructure [12] - ET's extensive midstream infrastructure, covering nearly 140,000 miles, provides a competitive edge by connecting key basins to major demand markets [10][11] Comparative Analysis - Energy Transfer's return on equity (ROE) is 11.08%, which is lower than the industry average of 13.65% [20] - In comparison, ONEOK Inc. has a higher ROE of 14.59%, indicating better utilization of shareholders' funds [23]

Core Viewpoint - Energy prices are currently volatile due to geopolitical issues, making the energy sector risky for investors. However, focusing on midstream energy businesses can mitigate commodity risk, with Enterprise Products Partners being highlighted as a strong investment option [1]. Midstream Energy Overview - Midstream energy businesses differ from upstream and downstream sectors as they own infrastructure like pipelines and storage facilities, generating consistent cash flows through fees rather than being directly tied to commodity prices [4]. - Midstream companies typically distribute a significant portion of their cash flows as dividends, which are generally generous in this sector [4]. Investment Comparison - Energy Transfer offers a distribution yield of 7.2%, while Enterprise Products Partners has a yield of 6.9%. Despite the higher yield from Energy Transfer, long-term dividend investors may prefer Enterprise due to its reliability [5][6]. - Enterprise Products Partners has a history of consistent distribution growth, having increased its payouts for 26 consecutive years, contrasting with Energy Transfer, which cut its dividend during the 2020 energy downturn [8][9]. Financial Stability - Enterprise Products Partners maintains a solid financial foundation with an investment-grade rated balance sheet and realistic management goals that are consistently met [9]. - In contrast, other midstream companies like Energy Transfer and Kinder Morgan have faced challenges, including dividend cuts and unmet growth promises during economic downturns [10][11]. Conclusion on Investment Choice - For investors looking for stability and reliability in the energy sector, Enterprise Products Partners is recommended over other midstream options like Energy Transfer or Kinder Morgan, especially for those investing $1,000 or more [12][13].