Enterprise Products Partners L.P. EPD is a prominent midstream energy player that generates stable, fee-based revenues by transporting, storing and processing oil, natural gas and petrochemicals. The partnership operates a vast, integrated network comprising more than 50,000 miles of pipelines, 300 million barrels of liquids storage capacity, 46 natural gas processing trains, 27 fractionators and 21 deepwater docks, along with two PDH and two iBDH facilities. EPD generates steady cash flows through long-term contracts under which shippers pay a fee for capacity reserved in its assets, regardless of actual usage.
To sustain cash flow generation, maintaining and expanding these assets are crucial and require significant capital investment, which the partnership supports through a conservative debt structure. This framework features 95% fixed-rate debt, a 17-year average maturity and a weighted-average borrowing cost of just 4.7%, which helps mitigate interest-rate and refinancing risks. EPD has roughly $3.3 billion in liquidity, providing sufficient resources to fund maintenance projects, growth investments, debt reduction and unitholder returns.
EPD continues to strengthen its balance sheet through disciplined capital allocation and the reinvestment of excess cash flow. The $5.3 billion in major expansion projects scheduled to enter service between 2026 and 2027, are expected to generate incremental cash flow. At the same time, rising global demand for natural gas, natural gas liquid and liquefied petroleum gas exports should support higher utilization across EPD’s processing, fractionation and export infrastructure, enhancing future cash flow and strengthening its balance sheet.
Do ENB & KMI Have Strong Balance Sheets Like EPD?
Enbridge Inc. ENB and Kinder Morgan, Inc. KMI are other midstream players that generate revenues from long-term contracts by renting space in their assets and have strong balance sheets similar to EPD’s.
Enbridge ended the first quarter of 2026 with strong liquidity of C$12.7 billion, providing significant financial flexibility. The company continues to advance nearly C$40 billion of secured growth projects across pipelines, natural gas, utilities and renewable power. Supported by rising liquified natural gas exports, power demand and data center growth, these projects are expected to strengthen ENB’s future cash flow and balance sheet.
Kinder Morgan maintained solid liquidity at the end of first-quarter 2026, with $72 million in cash and approximately $3.4 billion available under its credit facility. KMI’s $10.1 billion project backlog is expected to support incremental cash flow generation in the coming years, enhancing long-term balance sheet stability.
EPD’s Price Performance, Valuation & Estimates
Enterprise Products shares have gained 26.6% over the past year compared with 20.3% growth registered by the composite stocks belonging to the industry.
From a valuation standpoint, EPD trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 11.89X, below the broader industry average of 12.19X.
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The Zacks Consensus Estimate for EPD’s 2026 earnings has seen upward revisions over the past seven days.
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Enterprise Products currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).