Enterprise Products Partners LP\u2019s EPD pipeline network spans more than 50,000 miles, transporting oil, natural gas and other commodities. The partnership also has more than 300 million barrels of liquid storage capacity, thereby generating stable cash flows.<\/p>\n
Importantly, the business model of Enterprise Productsis inflation-protected because almost 90% of its long-term contracts include a provision for increasing fees when the business environment becomes inflationary. This is how the midstream energy player is able to safeguard its cash flow generation in all business scenarios.<\/p>\n
EPD is also expected to generate incremental cash flows from its billions of dollars\u2019 worth of key capital projects, which are either in service or set to come online. Thus, with the partnership\u2019s business model being mostly inflation-protected and likely to generate incremental cash flows from project backlogs, the stock could be attractive for income seekers.<\/p>\n
Kinder Morgan Inc. KMI and Enbridge Inc. ENB are two other midstream energy majors. By the very nature of their businesses, both KMI and ENB also have predictable cash flows. This is because KMI and ENB generate stable fee-based earnings from their respective midstream assets.<\/p>\n
Units of Enterprise Products have jumped 4.1% over the past year against the 8.5% decline of the composite stocks belonging to the industry.<\/p>\n
Zacks Investment Research <\/p>\n
Image Source: Zacks Investment Research<\/p>\n
From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV\/EBITDA) of 10.61X. This is below the broader industry average of 10.72X.<\/p>\n
Zacks Investment Research <\/p>\n
Image Source: Zacks Investment Research<\/p>\n
The Zacks Consensus Estimate for EPD\u2019s 2026 earnings has seen no estimate revisions over the past 30 days.<\/p>\n
Zacks Investment Research <\/p>\n
Image Source: Zacks Investment Research<\/p>\n
Enterprise Products currently carries a Zacks Rank #3 (Hold). You can see\u00a0the complete list of today\u2019s Zacks #1 Rank (Strong Buy) stocks here.<\/p>\n
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report<\/a><\/p>\n Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report<\/a><\/p>\n Enbridge Inc (ENB) : Free Stock Analysis Report<\/a><\/p>\n Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report<\/a><\/p>\n This article originally published on Zacks Investment Research (zacks.com).<\/a><\/p>\n