Enterprise Products Partners (NYSE:EPD), a top-tier U.S. midstream company, is showcasing a promising high-yield opportunity with a yield of 7.4%, backed by its robust financial health and key infrastructure assets. The company has maintained consistent income growth, which is reflected in its unique track record of over 25 years of dividend growth and an "A" rating from S&P Global. This is in line with InvestingPro Tips that highlight EPD's consistent increase in earnings per share and its 26-year streak of raising dividends.
Despite the partnership status that mandates distributions rather than dividends, EPD's financial resilience is evident in its healthy leverage ratio of 3x amidst a total debt of $29.05 billion. This ratio underscores the company's capacity to generate robust cash flows and fulfill obligations, which was particularly noticeable during the Great Financial Crisis, the COVID-19 pandemic, and the oil price collapse in 2015-16. This resilience is echoed in the InvestingPro Data, showing a market cap of $58.83 billion and a P/E ratio of 10.96, suggesting a strong financial position.
The company's operational cash flow per unit (OCFU) has remained resilient throughout these challenging periods. Moreover, even with a recent slowdown in dividend growth to a quarterly rate of $0.5, the high yield offers an appealing counterbalance.
Wall Street analysts have given EPD a Strong Buy consensus rating, with 10 Buys and two Holds assigned in the past three months. This consensus predicts a 17.8% upside potential with an average stock forecast at $31.92. Justin Jenkin from Raymond James stands as the most accurate analyst covering the stock.
As of the first half of 2023, EPD's payout ratio is at 57%, and its distributable cash flow per share is near $3.5, reflecting its solid performance for this period. This strong performance is further emphasized by the company's revenue growth of 1.84% in the last twelve months (LTM2023.Q2) as per InvestingPro Data.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.