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Do Greater Rewards Await Enterprise Products' Unit Holders?

Do Greater Rewards Await Enterprise Products' Unit Holders?

Globe and Mail3 hours ago

Enterprise Products Partners EPD, through its unit buyback program, continues to return capital to unitholders. The partnership's total buyback through the 12 months ending March 2025 has reached $239 million, resulting in a cumulative repurchase of approximately $1.2 billion under its buyback program. This underscores the partnership's strong confidence in creating long-term value from its business, thereby enhancing returns for unitholders.
With the market undervaluing Enterprise Products' units, allocating capital for buying back its own units is a smart move for the partnership. Thus, the remaining units are getting a bigger share of the partnership's earnings and cash flow, which is highly favorable for existing investors.
EPD anticipates generating additional free cash flow starting next year. This is primarily due to the completion of some key capital projects currently under construction, which, in turn, will lower the annual growth in capital expenditures. With more capital becoming available, Enterprise Products will likely allocate a greater amount of money for repurchases, thereby accelerating capital returns.
Are KMI & WMB Also Rewarding Investors Handsomely?
Kinder Morgan KMI and Williams WMB are also leading midstream energy players, thereby are less vulnerable to oil and gas price volatility. Despite their stable business models, both KMI and WMB currently reward investors with lower dividend yields than the industry's composite stocks.
Kinder Morgan's current dividend yield is 4.13%, lower than the industry's 5.20% yield. Williams' current dividend yield is 3.3%.
EPD's Price Performance, Valuation & Estimates
Units of EPD have gained 14.1% over the past year, surpassing the 13.2% improvement of the composite stocks belonging to the industry.
One-Year Price Chart
From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.00x. This is below the broader industry average of 11.39x.
The Zacks Consensus Estimate for EPD's 2025 earnings hasn't been revised over the past seven days. It currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Williams Companies, Inc. (The) (WMB): Free Stock Analysis Report
Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report
Kinder Morgan, Inc. (KMI): Free Stock Analysis Report

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