Latest news with #EnterpriseProducts
Globe and Mail
7 days ago
- Business
- Globe and Mail
Enterprise Products Up 16% in a Year: Should Investors Still Chase it?
Enterprise Products Partners LP EPD has surged 16.3% over the past year, outpacing the industry 's 10.3% improvement. Robust growth projects underway are likely to have supported the stock price movement. Still, before drawing any investment conclusions, it's better to analyze the fundamentals of the partnership and its overall business environment. One-Year Price Chart EPD's Stable Business Model & Robust Project Backlog Enterprise Products, a top-tier North American midstream service provider, boasts a vast and diversified asset portfolio. This includes more than 50,000 miles of pipelines and a storage capacity of 300 million barrels. These assets are utilized by shippers on long-term contracts to transport and store natural gas liquids, crude oil, refined products and petrochemicals. The partnership also has 14 billion cubic feet of natural gas storage capacity, securing stable fee-based revenues. On top of that, the partnership has $6 billion worth of key projects under construction, with the maximum in-service date by the end of 2026. These include new gas processing plants in the Permian Basin, a major NGL pipeline (Bahia) and expansions at export terminals. Once all the projects come online, it will generate additional cash flows for the unit holders. EPD's Competitive Advantage in Retaining & Attracting Customers The partnership's extensive network of midstream assets handles large volumes of processing and transportation. This includes processing approximately 7.8 billion cubic feet of natural gas daily and transporting more than 1 million barrels of refined products and petrochemicals per day. Enterprise Products benefits from a strong competitive edge, as its midstream network is linked to all U.S. ethylene plants and nearly 90% of refineries located east of the Rockies, enabling it to attract and retain customers more effectively. Should Investors Bet on EPD Right Away? Apart from the positive developments, Enterprise Products' units are also undervalued. The stock is currently trading at a trailing 12-month enterprise value-to-EBITDA (EV/EBITDA) of 10.16x. This represents a discount compared with the broader industry average of 11.01x and midstream giants like Kinder Morgan KMI and Enbridge ENB, which trade at 13.71x and 15.32x, respectively. Is now the moment to invest in the stock that generates stable fee-based revenues like Kinder Morgan and Enbridge? There are a few uncertainties to keep in mind first. Before getting to the topic, let's discuss KMI and ENB a little bit. Considering KMI's business, it operates an extensive network of pipelines spanning 79,000 miles, transporting natural gas, gasoline, crude oil and carbon dioxide. In addition, the company owns 139 terminals that store a variety of products, including renewable fuels, petroleum products, chemicals and vegetable oils. As a leading midstream service provider, Kinder Morgan's pipeline and storage assets are secured under long-term take-or-pay contracts. These contracts ensure the stability of Kinder Morgan's business. Similarly, Enbridge benefits from the long-term, fee-based nature of its midstream operations. Its pipelines transport 20% of the total natural gas consumed in the United States. The company generates stable, fee-based revenues from these midstream assets, as they are booked by shippers on a long-term basis, minimizing commodity price volatility and volume risks. Now coming back to EPD's story. Unit holders should note that more players are now competing in the LPG export business, which has pushed prices that customers pay to use terminals down from about 10–15 cents per gallon to much lower levels. This tougher competition means Enterprise Products might earn less profit from the exports in the future, especially when older, higher-paying contracts run out. Moreover, analysts are concerned that there are too many pipelines and processing plants being built, which could hurt profits if demand doesn't keep up, though EPD's long-term contracts offer some protection. Thus, investors shouldn't rush to bet on the stock right away. However, those who have already invested should retain EPD, which carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. See our %%CTA_TEXT%% report – free today! 7 Best Stocks for the Next 30 Days Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report Enbridge Inc (ENB): Free Stock Analysis Report Kinder Morgan, Inc. (KMI): Free Stock Analysis Report
Yahoo
08-08-2025
- Business
- Yahoo
Kinder Morgan's Expanding Backlog: Powering the LNG & Electricity Boom
Kinder Morgan Inc. KMI, a leading midstream energy company, has seen a surge in its project backlog in the June quarter of 2025. The backlog grew to $9.3 billion from $8.8 billion, reflecting strong demand for its services and thereby securing incremental fee-based revenues. Thus, KMI will likely generate more cash flows for its shareholders. In the June quarter, Kinder Morgan took on $1.3 billion in new projects, which is quite encouraging. Key developments include the Trident Phase 2 project and the Louisiana Line Texas Access project, both of which are designed to transport natural gas from Texas to Louisiana, a vital region for LNG (liquefied natural gas) exports. Interestingly, with the rising demand for LNG export, both long-term projects are backed by solid customer commitments, further reassuring incremental and reliable cash flows. Interestingly, almost half of the backlog's projects are backed by mounting power demand. With the rising need for electricity from the booming data centers and the growth in population, natural gas transportation and storage have become paramount, thereby glorifying Kinder Morgan's business outlook. Have EPD & ENB Also Secured Incremental Cash Flows? Like KMI,Enterprise Products Partners LP EPD and Enbridge Inc. ENB also have a solid backlog of midstream developments. Enterprise Products has a backlog of $5.6 billion of key midstream capital projects under construction with a maximum in-service date of 2026. Thus, EPD has secured additional cash flows for its unit holders. Enbridge also has a total secured capital program of C$32 billion, with the company mentioning that capital that has been spent to date is C$7 billion. Thus, like EPD, ENB is also securing incremental cash flows. KMI's Price Performance, Valuation & Estimates Shares of KMI have gained 34.3% over the past year compared with the 29.2% improvement of the industry. Image Source: Zacks Investment Research From a valuation standpoint, KMI trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 13.77X. This is below the broader industry average of 13.95X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for KMI's 2025 earnings has been revised upward over the past 30 days. Image Source: Zacks Investment Research Kinder Morgan stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report Enbridge Inc (ENB) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-08-2025
- Business
- Yahoo
Kinder Morgan's Expanding Backlog: Powering the LNG & Electricity Boom
Kinder Morgan Inc. KMI, a leading midstream energy company, has seen a surge in its project backlog in the June quarter of 2025. The backlog grew to $9.3 billion from $8.8 billion, reflecting strong demand for its services and thereby securing incremental fee-based revenues. Thus, KMI will likely generate more cash flows for its shareholders. In the June quarter, Kinder Morgan took on $1.3 billion in new projects, which is quite encouraging. Key developments include the Trident Phase 2 project and the Louisiana Line Texas Access project, both of which are designed to transport natural gas from Texas to Louisiana, a vital region for LNG (liquefied natural gas) exports. Interestingly, with the rising demand for LNG export, both long-term projects are backed by solid customer commitments, further reassuring incremental and reliable cash flows. Interestingly, almost half of the backlog's projects are backed by mounting power demand. With the rising need for electricity from the booming data centers and the growth in population, natural gas transportation and storage have become paramount, thereby glorifying Kinder Morgan's business outlook. Have EPD & ENB Also Secured Incremental Cash Flows? Like KMI,Enterprise Products Partners LP EPD and Enbridge Inc. ENB also have a solid backlog of midstream developments. Enterprise Products has a backlog of $5.6 billion of key midstream capital projects under construction with a maximum in-service date of 2026. Thus, EPD has secured additional cash flows for its unit holders. Enbridge also has a total secured capital program of C$32 billion, with the company mentioning that capital that has been spent to date is C$7 billion. Thus, like EPD, ENB is also securing incremental cash flows. KMI's Price Performance, Valuation & Estimates Shares of KMI have gained 34.3% over the past year compared with the 29.2% improvement of the industry. Image Source: Zacks Investment Research From a valuation standpoint, KMI trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 13.77X. This is below the broader industry average of 13.95X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for KMI's 2025 earnings has been revised upward over the past 30 days. Image Source: Zacks Investment Research Kinder Morgan stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report Enbridge Inc (ENB) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-08-2025
- Business
- Yahoo
Will EPD's $5.6B Project Backlog Translate Into Higher Margins?
Enterprise Products Partners EPD is forging ahead with its streamlined $5.6-billion capital project portfolio, down from the previous $7.6 billion, as several projects have already been brought online. Most organic growth capital projects are expected to become operational by the end of 2025, with a final in-service date no later than 2026. The major infrastructure projects include the Orion and the Mentone West gas processing plant in the Permian Basin, both of which are already in operation. By the fourth quarter of 2025, EPD expects to put online the Bahia NGL Pipeline, Fractionator 14 and the Neches River export terminal. Bringing these assets into service in 2025 will deliver substantial benefits to EPD. These projects will contribute to increased fee-based revenue streams, as most of EPD's contracts have built-in escalation clauses to mitigate inflation impacts. The expansions in gas processing and fractionation capabilities will enable the partnership to handle growing production volumes, especially from the Permian Basin, one of the most prolific hydrocarbon regions in the United States. This will boost throughput and help secure long-term commitments from producers and downstream customers. In the first half of 2025, about 81% of EPD's gross operating margin was derived from fee-based sources, reinforcing the partnership's defensive earnings profile. This fee-based model significantly cushions Enterprise Products from short-term commodity price volatility and remains a fundamental driver behind its ability to consistently grow distributions for 27 consecutive years, maintaining growth even through the 2008 financial crisis, the 2015 oil collapse and the coronavirus pandemic. Are KMI & MPLX's Project Pipelines Driving Growth? Kinder Morgan KMI reported a project backlog of $9.3 billion at the end of the second quarter of 2025, with about 93% tied to natural gas infrastructure. About $7.6 billion in backlog (excluding CO2 enhanced oil recovery and gathering and processing projects) is expected to deliver an average first full-year project EBITDA multiple of 5.6 times. KMI plans to spend $2.3 billion annually on capital projects, going forward. MPLX LP MPLX has committed more than $5 billion in 2025 for growth initiatives, with nearly 90% of this capital allocated to natural gas and NGL services. This substantial investment includes both organic growth capital totaling $1.7 billion, and bolt-on mergers and acquisitions valued at $3.5 billion. These developments are concentrated in key basins such as the Permian, Marcellus and Utica, which are central to MPLX's long-term growth and export strategies. EPD's Price Performance, Valuation & Estimates EPD units have gained 6.5% over the past year, outpacing 3.7% growth of the composite stocks belonging to the industry. Image Source: Zacks Investment Research From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.09X. This is below the broader industry average of 11.36X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for EPD's 2025 earnings has been revised downward over the past 30 days. Image Source: Zacks Investment Research EPD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report MPLX LP (MPLX) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
07-08-2025
- Business
- Yahoo
Enterprise Products Partners to buy Occidental's Midland Basin affiliate
Enterprise Products Partners' affiliates have executed an agreement to acquire a natural gas-gathering affiliate from Occidental. The acquisition includes a long-term dedication of approximately 73,000 acres across four counties in the Midland Basin, with assets comprising around 200 miles (321.8km) of natural gas-gathering pipelines. The pipelines support Occidental's production activities and offer Enterprise more than 1,000 drillable locations, providing long-term development visibility and an immediate expansion of its natural gas-gathering footprint. The $580m debt-free cash deal will also see Enterprise Products build the new Athena natural gas processing plant, enhancing its processing capacity in the region. The Athena plant, which is expected to start service in the fourth quarter of 2026 (Q4 2026), will have the capacity to process 300 million cubic feet per day (mcf/d) of natural gas and extract up to 40,000 barrels per day (bpd) of natural gas liquids (NGLs). Upon completion, Enterprise's Midland Basin assets will be capable of processing 2.2 billion cubic feet per day of natural gas and extracting 310,000bpd of NGLs. Enterprise's general partner co-CEO A.J. Teague said: 'These agreements with Occidental are consistent with Enterprise's focus on expanding our Midland Basin franchise through organic investments in our midstream network and through targeted acquisitions that bolt-on to our existing infrastructure. 'To accommodate production growth in this area of the basin, Enterprise will build its ninth Midland Basin natural gas processing plant and expand its natural gas-gathering system. The Permian Basin is responsible for approximately 90% of domestic liquid hydrocarbons growth and our continued investment in natural gas processing infrastructure supports Enterprise's producer customers and brings additional volume into the company's integrated natural gas liquids value chain.' The strategic investments in the Athena plant and expansions of Enterprise's Midland Basin gathering system are part of the company's estimated growth capital expenditures of $4bn–4.5bn for 2025 and $2.2bn–2.5bn for 2026. The deal is subject to customary regulatory approvals and is expected to close in Q3 2025. In February 2025, Occidental also agreed to divest certain upstream assets for a combined value of $1.2bn. These assets included non-operated assets in the Rockies and select Permian Basin assets not included in Occidental's immediate development plans. "Enterprise Products Partners to buy Occidental's Midland Basin affiliate" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
