Enterprise Products Partners L.P. (EPD): Among the Low PE High Dividend Stocks to Buy Now

Enterprise Products Partners L.P. (EPD) is a midstream energy company that provides a range of services related to the transportation, storage, and processing of natural gas, crude oil, and other petroleum products. With a market capitalization of over $70 billion, EPD offers a compelling combination of strong financial performance, robust dividend yield, and a promising growth outlook. This article explores why EPD is an attractive investment option among low PE high dividend stocks in the energy sector.



Strong Financial Performance

EPD reported an EBITDA of $9.9 billion for 2024 and distributable cash flow (DCF) of $7.8 billion, with a coverage ratio of 1.7 times. This robust financial performance is a testament to the company's operational excellence and its ability to generate substantial cash flows. Additionally, EPD's net income attributable to common unitholders increased by 3% in the fourth quarter of 2024 compared to the previous year, demonstrating the company's consistent earnings growth.



High Dividend Yield and Consistent Payouts

EPD offers a dividend yield of 6.28%, which is significantly higher than the average dividend yield of the S&P 500. The company has a history of consistent dividend payments, with a distribution of $0.535 per common unit for the fourth quarter of 2024, a 4% increase over the previous year. This high dividend yield and consistent payout history indicate that EPD is committed to returning value to shareholders and generating substantial cash flows.

Promising Growth Outlook

EPD's strong financial performance and high dividend yield are supported by a promising growth outlook. The company is expanding its processing and export capabilities, aiming to export over 100 million barrels per month by 2027. Additionally, EPD is investing $7.6 billion in capital projects, demonstrating its commitment to growth and maintaining its infrastructure. These strategic initiatives position EPD well to continue its strong performance and generate long-term value for shareholders.



Analyst Sentiment and Price Target

According to 12 analysts, the average rating for EPD stock is "Buy." The 12-month stock price forecast is $34.45, which is an increase of 3.02% from the latest price. This positive analyst sentiment supports the notion that EPD is an attractive investment option with a promising future.

Risks and Challenges

While EPD's strong financial performance, high dividend yield, and promising growth outlook make it an attractive investment, it is essential to consider the potential risks and challenges. The energy sector is subject to market fluctuations and economic downturns, which could impact EPD's financial performance. Additionally, changes in energy policies and regulations could affect the company's operations and growth prospects. Investors should carefully evaluate these risks and monitor EPD's performance to ensure that the company continues to meet their investment objectives.



In conclusion, Enterprise Products Partners L.P. (EPD) is an attractive investment option among low PE high dividend stocks in the energy sector. The company's strong financial performance, high dividend yield, and promising growth outlook make it a compelling choice for investors seeking steady income and long-term capital appreciation. However, it is essential to carefully evaluate the potential risks and challenges and monitor EPD's performance to ensure that the company continues to meet your investment objectives.