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 2024 earnings per unit is pegged at $2.71, indicating a year-over-year increase of 7.1%.
Enterprise Products, which currently carries a Zacks Rank #3 (Hold), has a stable business model and is not significantly exposed to the volatility in oil and gas prices. It generates stable fee-based revenues from its extensive pipeline network spread across more than 50,000 miles, transporting natural gas, natural gas liquids (NGLs), 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 $6.7 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. Enterprise Products’ liquidity profile is impressive. Along with second-quarter 2024 results, the company reported consolidated liquidity of $3.4 billion, which includes unrestricted cash and available borrowing capacity.
Enterprise Products has several assets that have been providing midstream services for many years. This has raised the possibility of investing massive capital in maintaining those infrastructures. Thus, EPD could witness an increase in maintenance or repair expenses.
As upstream players mainly focus on stockholder returns rather than boosting output, a slowdown in drilling activities is hurting production. This is hurting the demand for transportation and storage to some extent. Other midstream players that might also be affected include The Williams Companies Inc. WMB, Kinder Morgan, Inc. KMI and Enbridge Inc. ENB.
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.
Kinder Morgan operates an extensive network of pipelines spanning 79,000 miles, transporting natural gas, gasoline, crude oil and carbon dioxide. In addition, the company owns 139 terminals that store a variety of products, including renewable fuels, petroleum products, chemicals and vegetable oils.
Enbridge is also a midstream energy player in North America, operating an extensive crude oil and liquids transportation network spanning 18,085 miles — the world's longest and most complex system.
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Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
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