Enterprise Products Partners LP EPD has announced approvals from the board of directors of its general partners to increase quarterly distributions.

The hiked quarterly distribution to be paid to its common unitholders is 53.5 cents per unit, which is $2.14 per unit on an annualized basis. Enterprise Products said that the fourth-quarter distribution, representing an increase of 1.9% from the prior-quarter distribution, will be paid on Feb. 14 to common unitholders of record as of the close of business on Jan. 31.

Enterprise Products is also repurchasing units to return capital to unit holders. Through the December quarter of 2024, in the open market, the partnership repurchased $63 million of its common units. Last year, EPD bought back a total of $219 million of common units, utilizing 57% of its $2 billion authorized repurchase program.

EPD, currently carrying a Zacks Rank #3 (Hold), has a stable business model and is not significantly exposed to the volatility in oil and gas prices. Enterprise Products generates stable fee-based revenues from its extensive pipeline network that spreads 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.

Other midstream players that also generate stable fee-based revenues and are less vulnerable to oil and gas prices 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

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