Enterprise Products Partners LP EPD is a leading midstream energy player with low exposure to volume and price risks. The Zacks Consensus Estimate for the partnership’s 2025 earnings per unit is pegged at $2.90, indicating a year-over-year increase of 7.8%.
Enterprise Products, which currently carries a Zacks Rank #2 (Buy), has a stable business model and is not significantly exposed to the volatility in oil and gas prices. The company generates stable fee-based revenues from its extensive pipeline network across more than 50,000 miles, transporting natural gas, natural gas liquids, crude oil petrochemicals and refined products. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The midstream infrastructure provider has storage assets that can hold more than 260 million barrels of NGL, petrochemicals, refined products and crude oil. These assets can store 14 billion cubic feet of natural gas. Enterprise Products has $7.6 billion of key approved projects under construction that are likely to provide incremental fee-based revenues.
The partnership’s balance sheet has lower debt exposure than the composite stocks belonging to the industry. The liquidity profile of EPD is impressive. Along with fourth-quarter 2024 results, the company reported consolidated liquidity of $4.8 billion, which includes unrestricted cash and available borrowing capacity.
Like Enterprise Products, other midstream players that are also backed by stable fee-based revenues are The Williams Companies Inc. WMB, Enbridge Inc. ENB and Kinder Morgan, Inc. KMI.
Having ownership and operating interests in pipeline networks spanning 33,000 miles, The Williams Companies transports natural gas from the prolific basins in the United States to the end market.
With a significant portion of its assets being contracted by shippers for the long term, Enbridge’s business model is less exposed to volatility in oil and gas prices. Backed by long-term contracts, ENB’s business model has considerably lower volume risk exposure.
Being a leading midstream service provider, Kinder Morgan’s pipeline and storage assets are secured under long-term take-or-pay contracts. These contracts ensure that shippers pay for the capacity reserved, whether they utilize it or not, which provides a steady stream of revenues. This structure allows Kinder Morgan to generate stable earnings insulated from fluctuations in the volume of natural gas transported, offering significant stability to its bottom line.
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Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report
Enbridge Inc (ENB) : Free Stock Analysis Report
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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