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Here's Why Enterprise (EPD) is an Attractive Investment Bet
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Enterprise Products Partners LP (EPD - Free Report) has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days.
What’s Favoring the Stock?
Enterprise Products 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 across more than 50,000 miles, transporting natural gas, natural gas liquids (NGLs), crude oil petrochemicals and refined products.
The midstream infrastructure provider also has storage assets that can hold more than 260 million barrels of NGL, petrochemical, refined products and crude oil. These assets can also store 14 billion cubic feet of natural gas. Moreover, Enterprise Products has $5.5 billion of major capital 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. Its debt-to-capitalization ratio of 0.52 is lower than the industry’s 0.53. The ratio has persistently been lower than the stocks in the industry in the past few years. The liquidity profile of Enterprise Products is impressive, as it completed the second quarter with consolidated liquidity of $4.1 billion, which incorporates available borrowing capacity along with unrestricted cash.
In the past year, the stock, carrying a Zacks Rank #2 (Buy), has gained 18.6%, outpacing the 15.4% rise of the composite stocks belonging to the industry.
The positive oil price trajectory is a boon for BP’s upstream operations. The favorable oil price scenario and increasing daily oil equivalent production volumes are aiding the energy giant’s bottom line. BP stated that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key new projects has been delivered.
In the core of gas-rich Marcellus and Utica Shales, EQT Corporation has a strong foothold. Being a leading producer of natural gas, EQT is benefiting from high natural gas price. For 2022, it is likely to witness earnings growth of 328.3%.
Eni is expecting the discovery of 700 million barrels of oil equivalent (BoE) of new exploration resources this year, suggesting an improvement from the prior guidance of 600 million BoE. For 2022, Eni is likely to witness earnings growth of 165.9%.
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Here's Why Enterprise (EPD) is an Attractive Investment Bet
Enterprise Products Partners LP (EPD - Free Report) has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days.
What’s Favoring the Stock?
Enterprise Products 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 across more than 50,000 miles, transporting natural gas, natural gas liquids (NGLs), crude oil petrochemicals and refined products.
The midstream infrastructure provider also has storage assets that can hold more than 260 million barrels of NGL, petrochemical, refined products and crude oil. These assets can also store 14 billion cubic feet of natural gas. Moreover, Enterprise Products has $5.5 billion of major capital 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. Its debt-to-capitalization ratio of 0.52 is lower than the industry’s 0.53. The ratio has persistently been lower than the stocks in the industry in the past few years. The liquidity profile of Enterprise Products is impressive, as it completed the second quarter with consolidated liquidity of $4.1 billion, which incorporates available borrowing capacity along with unrestricted cash.
In the past year, the stock, carrying a Zacks Rank #2 (Buy), has gained 18.6%, outpacing the 15.4% rise of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other prospective players in the energy space include BP plc (BP - Free Report) , EQT Corporation (EQT - Free Report) and Eni SpA (E - Free Report) . While BP and Eni carry a Zacks Rank #2, EQT sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The positive oil price trajectory is a boon for BP’s upstream operations. The favorable oil price scenario and increasing daily oil equivalent production volumes are aiding the energy giant’s bottom line. BP stated that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key new projects has been delivered.
In the core of gas-rich Marcellus and Utica Shales, EQT Corporation has a strong foothold. Being a leading producer of natural gas, EQT is benefiting from high natural gas price. For 2022, it is likely to witness earnings growth of 328.3%.
Eni is expecting the discovery of 700 million barrels of oil equivalent (BoE) of new exploration resources this year, suggesting an improvement from the prior guidance of 600 million BoE. For 2022, Eni is likely to witness earnings growth of 165.9%.