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Zacks' 7 Best Strong Buy Stocks (New Research Report)
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Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
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Here's Why Hold Strategy is Apt for Enterprise Products Stock Now
Enterprise Products Partners LP (EPD - Free Report) 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 $2.91, indicating a year-over-year increase of 8%.
Factors Working in Favor of EPD
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. 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.
Risks to EPD’s Business
Enterprise Products has several assets 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.
A slowdown in drilling activities, as upstream players mainly focus on stockholder returns rather than boosting output, is hurting production. This is affecting the demand for transportation and storage assets of EPD to some extent. Other midstream players that are also being adversely impacted by slowing production growth are The Williams Companies Inc. (WMB - Free Report) , Enbridge Inc. (ENB - Free Report) and Kinder Morgan, Inc. (KMI - Free Report) .
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.
Similarly, Enbridge operates a liquid and crude oil pipeline network covering roughly 18,085 miles. The network is the longest and most complex transportation system in North America.
Meanwhile, Kinder Morgan stands out as a leading midstream service provider with an extensive 79,000-mile pipeline network, reinforcing its significant role in the energy infrastructure landscape.