Key Points
Enterprise Products Partners boasts of a 6.2% distribution yield, backed by record operating cash flows.
The company’s resilient business model and new assets are helping reduce its revenue volatility, even in tough industry conditions.
The company also has clear visibility into future revenue growth.
- 10 stocks we like better than Enterprise Products Partners ›
In a market obsessed with artificial intelligence stocks and high-flying meme names, midstream oil and gas player Enterprise Products Partners (NYSE: EPD) has not received the attention it deserves.
This oil and gas pipeline operator, which is structured as a master limited partnership (MLP), offers a distribution (dividend) yield of 6.2% and has increased its distributions for 28 consecutive years.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Enterprise Products Partners also boasts strong financials. In fiscal 2025, the MLP reported record cash flow from operations of $8.7 billion and returned roughly $5 billion in capital to shareholders. With a payout ratio of nearly 58% of adjusted cash flow from operations, the distribution is clearly funded by operating performance and not debt or accounting adjustments.
Enterprise Products Partners also expects to generate $1 billion worth of discretionary free cash flow in 2026, with 50% to 60% earmarked for unit repurchases. This buyback activity could further improve distribution per unit shares for the remaining investors.
Image source: Getty Images.
Resilient business backs distributions
Enterprise Products Partners earns the majority of its revenues from long-term, fee-based contracts tied to volumes rather than oil and gas prices. Management further noted that the new assets brought online during 2025 helped offset some of the negative impact from the company's commodity-sensitive businesses and narrower marketing margins.
Enterprise Products also has about $4.8 billion worth of major projects underway, including several natural gas gathering, compression, and treating projects across the Permian Basin as well as expansions at the Neches River Terminal and incremental LPG export capacity along the Gulf Coast. The company expects to invest $2.5 billion to $2.9 billion in 2026 and $2 billion to $2.5 billion in 2027 on additional growth projects. The capital program provides clear visibility into future cash flow growth in the coming years.
Management has also highlighted that liquified petroleum gas exports are already contracted through 2030. As terminals expand and utilization rises, the company plans to export 1.5 million barrels per day of natural gas liquids by 2026. This would position exports as another incremental growth driver.
In this environment, this MLP seems a smart income-focused pick in 2026.
Should you buy stock in Enterprise Products Partners right now?
Before you buy stock in Enterprise Products Partners, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Enterprise Products Partners wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $443,299!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,136,601!*
Now, it’s worth noting Stock Advisor’s total average return is 914% — a market-crushing outperformance compared to 195% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 9, 2026.
Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
