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EPD Trades Near its 52-Week High: Should You Buy the Stock Right Now?
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Enterprise Products Partners LP (EPD - Free Report) ended the last trading session at $33.59 per unit, just 3% below its 52-week high of $34.63. Despite the stock nearing its peak, it remains relatively undervalued, trading at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) ratio of 10.60, which is lower than the broader industry average of 12.24.
Image Source: Zacks Investment Research
Should investors jump into the stock now? Before answering that, let's take a closer look at the midstream energy player's business and fundamentals.
Impressive Project Backlogs Drive EPD’s Growth Outlook
Enterprise Products, a top-tier North American midstream service provider, boasts a vast and diversified asset portfolio, which includes more than 50,000 miles of pipelines and a storage capacity of 300 million barrels. Shippers utilize these assets in long-term contracts to transport and store natural gas liquids, crude oil, refined products and petrochemicals. The partnership also has 14 billion cubic feet of natural gas storage capacity, securing stable fee-based revenues.
EPD is set to generate additional fee-based earnings with $7.6 billion worth of major capital projects either currently in service or under construction. These project backlogs will not only secure stable cashflows but also generate handsome returns for unitholders.
Supported by its stable and resilient business model, Enterprise Products has achieved more than two decades of distribution hikes. The current distribution yield of the partnership is 6.4%, higher than 6.1% of the composite stocks belonging to the industry.
Distribution Yield
Image Source: Zacks Investment Research
EPD Expands Infrastructure & Leverages Technology
In 2024 and early 2025, Enterprise Products completed the construction of two new natural gas processing plants in the Permian Basin, bolstering its infrastructure for increased hydrocarbon movement. The partnership also acquired Pinon Midstream, enhancing its sour gas treating and gathering capabilities, and secured joint venture interests in the Midland to ECHO 1 crude oil pipeline, as well as its seventh and eighth fractionators.
Further reinforcing its extensive asset base, EPD transported 12.9 million barrels of oil equivalent per day in 2024, peaking at 13.6 million barrels per day in the fourth quarter. EPD’s 2025 expansion plans include commissioning two additional gas processing plants in the Permian, the Bahia NGL pipeline, Frac 14, the first phase of its NGL export facility on the Neches River and continued expansions of the ethane and ethylene terminal at Morgan’s Point. These developments align with the partnership’s long-term strategy to scale exports and achieve its ambitious target of moving more than 100 million barrels of hydrocarbons per month by 2027.
Also, the partnership uses advanced technology to make its pipelines run more efficiently and profitably. It analyzes massive amounts of data in real-time to predict issues, plan maintenance and optimize operations.
EPD’s LPG Export Leadership Through Cost-Efficient Expansions
Enterprise Products remains steadfast in maintaining its leadership in LPG exports despite increasing competition from new projects. The partnership is focused on cost-effective brownfield expansions rather than investing in expensive greenfield developments. EPD emphasizes that its expansion capital is significantly lower than that required for greenfield projects, making its approach more economical and competitive. Management reaffirmed its commitment to retaining its strong position by providing services that are more favorable to customers than competitors. This strategy ensures that EPD continues to dominate the LPG export market while optimizing its existing infrastructure to enhance efficiency and maintain cost advantages.
Is it the Right Time to Bet on EPD?
Notably, Enterprise Products maintains a strong and well-managed debt profile. Among midstream companies, the partnership holds the highest credit rating, highlighting its financial stability. EPD benefits from a low-weighted average cost of debt at 4.7%, with 98.2% of its debt secured at fixed rates.
Backed by the positives, the stock has gained 17.9% in the past six months compared with the 14.3% growth of the composite stocks belonging to the industry. Among notable midstream companies, Kinder Morgan Inc (KMI - Free Report) and Enbridge Inc (ENB - Free Report) recorded gains of 28.2% and 9%, respectively.
Image: Bigstock
EPD Trades Near its 52-Week High: Should You Buy the Stock Right Now?
Enterprise Products Partners LP (EPD - Free Report) ended the last trading session at $33.59 per unit, just 3% below its 52-week high of $34.63. Despite the stock nearing its peak, it remains relatively undervalued, trading at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) ratio of 10.60, which is lower than the broader industry average of 12.24.
Should investors jump into the stock now? Before answering that, let's take a closer look at the midstream energy player's business and fundamentals.
Impressive Project Backlogs Drive EPD’s Growth Outlook
Enterprise Products, a top-tier North American midstream service provider, boasts a vast and diversified asset portfolio, which includes more than 50,000 miles of pipelines and a storage capacity of 300 million barrels. Shippers utilize these assets in long-term contracts to transport and store natural gas liquids, crude oil, refined products and petrochemicals. The partnership also has 14 billion cubic feet of natural gas storage capacity, securing stable fee-based revenues.
EPD is set to generate additional fee-based earnings with $7.6 billion worth of major capital projects either currently in service or under construction. These project backlogs will not only secure stable cashflows but also generate handsome returns for unitholders.
Supported by its stable and resilient business model, Enterprise Products has achieved more than two decades of distribution hikes. The current distribution yield of the partnership is 6.4%, higher than 6.1% of the composite stocks belonging to the industry.
Distribution Yield
EPD Expands Infrastructure & Leverages Technology
In 2024 and early 2025, Enterprise Products completed the construction of two new natural gas processing plants in the Permian Basin, bolstering its infrastructure for increased hydrocarbon movement. The partnership also acquired Pinon Midstream, enhancing its sour gas treating and gathering capabilities, and secured joint venture interests in the Midland to ECHO 1 crude oil pipeline, as well as its seventh and eighth fractionators.
Further reinforcing its extensive asset base, EPD transported 12.9 million barrels of oil equivalent per day in 2024, peaking at 13.6 million barrels per day in the fourth quarter. EPD’s 2025 expansion plans include commissioning two additional gas processing plants in the Permian, the Bahia NGL pipeline, Frac 14, the first phase of its NGL export facility on the Neches River and continued expansions of the ethane and ethylene terminal at Morgan’s Point. These developments align with the partnership’s long-term strategy to scale exports and achieve its ambitious target of moving more than 100 million barrels of hydrocarbons per month by 2027.
Also, the partnership uses advanced technology to make its pipelines run more efficiently and profitably. It analyzes massive amounts of data in real-time to predict issues, plan maintenance and optimize operations.
EPD’s LPG Export Leadership Through Cost-Efficient Expansions
Enterprise Products remains steadfast in maintaining its leadership in LPG exports despite increasing competition from new projects. The partnership is focused on cost-effective brownfield expansions rather than investing in expensive greenfield developments. EPD emphasizes that its expansion capital is significantly lower than that required for greenfield projects, making its approach more economical and competitive. Management reaffirmed its commitment to retaining its strong position by providing services that are more favorable to customers than competitors. This strategy ensures that EPD continues to dominate the LPG export market while optimizing its existing infrastructure to enhance efficiency and maintain cost advantages.
Is it the Right Time to Bet on EPD?
Notably, Enterprise Products maintains a strong and well-managed debt profile. Among midstream companies, the partnership holds the highest credit rating, highlighting its financial stability. EPD benefits from a low-weighted average cost of debt at 4.7%, with 98.2% of its debt secured at fixed rates.
Backed by the positives, the stock has gained 17.9% in the past six months compared with the 14.3% growth of the composite stocks belonging to the industry. Among notable midstream companies, Kinder Morgan Inc (KMI - Free Report) and Enbridge Inc (ENB - Free Report) recorded gains of 28.2% and 9%, respectively.
Six-Month Price Chart
Thus, with the long-term potential looking attractive, it’s the right time to buy the undervalued stock. The stock carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.