Enterprise Products Partners: The Steady Hand in Berkowitz's High-Stakes Portfolio

Bruce Berkowitz, the contrarian investor known for his bold bets, has once again placed his faith in a company that others might overlook. Enterprise Products Partners L.P. (NYSE: EPD), a midstream energy giant, has become one of his top holdings, accounting for nearly a third of his portfolio as of late 2024. This isn’t just a passive holding: Berkowitz’s $186 million stake in EPD reflects a calculated bet on a business insulated from market volatility—a rare gem in an era of AI-driven speculation and geopolitical turbulence.

The Berkowitz Play: A Concentrated Bet on Stability

Berkowitz’s portfolio is famously concentrated, with EPD, St. Joe Co. (JOE), and Bank OZK (OZK) comprising over 97% of his investments. This extreme focus suggests he sees EPD not just as a “good stock,” but as a cornerstone of his strategy. By Q4 2024, EPD’s position had grown to $186.46 million, up from $170.88 million just a quarter earlier—a sign of conviction in the face of market skepticism.

Why Analysts Are Bullish: A $38 Price Target and More

Analysts are increasingly vocal about EPD’s upside. Bank of America’s Jean Ann Salisbury reaffirmed a “Buy” rating in May 2025, setting a $38 price target—a 23% premium to its May 2024 valuation. This optimism isn’t unfounded. A discounted cash flow (DCF) analysis from April 2025 suggested EPD could be undervalued by over 150% at $98.74 per share, though a more conservative $37.50 target accounts for near-term headwinds.

The stock’s current 11x price-to-earnings multiple stands far below its peers, offering a margin of safety. Meanwhile, its 7.1% dividend yield—among the highest in the sector—provides a cushion against market dips.

The Case for Resilience: A Toll-Taker in a Volatile World

EPD’s model is a masterclass in risk mitigation. Unlike exploration firms, it generates revenue through “toll-taking” fees for pipelines, storage, and processing. This structure insulates it from oil and gas price swings, making it a reliable cash generator even as global markets gyrate.

Take its recent Q1 2024 results: despite a slight miss in earnings due to lower marketing margins, EPD maintained a 13.5% gross profit margin and highlighted a stable backlog of projects. The company’s plan to launch a stock buyback program by 2026 further signals confidence in its cash flow.

Growth drivers are also in place. EPD’s LPG export capacity—a cheaper alternative to competitors—coupled with take-or-pay contracts for projects like the Mont Belvieu expansion, ensures predictable revenue. Brownfield projects (expansions of existing infrastructure) keep costs low, giving EPD an edge over rivals needing greenfield developments.

The Risks: No Investment Is Risk-Free

Even the most defensive plays have vulnerabilities. EPD’s fortunes hinge on stable energy demand, which could falter if global economies slow or renewable energy adoption accelerates faster than expected. Regulatory risks, such as stricter environmental rules, or geopolitical events like trade wars, could also disrupt its operations.

Yet these risks are mitigated by EPD’s diversified asset base and long-term contracts. Its 2023 backlog of $12.5 billion in committed projects, for instance, reduces reliance on uncertain near-term demand.

Conclusion: A Steady Hand for Uncertain Times

Enterprise Products Partners is a paradox in today’s market: a high-yield, low-risk stock in an era of high-risk, low-yield tech bets. Berkowitz’s outsized stake isn’t just about upside—it’s about resilience. With a 23.46% upside potential (per May 2024 estimates), a dividend yield of 7.1%, and a P/E ratio half that of peers, EPD offers a rare combination of income, safety, and growth.

Analysts’ $38 price target implies gains of $12.75 per share from its May 2025 price of $25.25—a compelling reward for investors willing to look beyond the next earnings report. While no stock is bulletproof, EPD’s “toll-taking” model and Berkowitz’s proven track record suggest this could be one of the decade’s smarter bets.

In a world chasing volatility, Berkowitz is doubling down on stability—and EPD is where he’s placing his chips.