Keith Speights, The Motley Fool

Sun, Jun 15, 2025, 9:33 AM4 min read

• Enterprise Products Partners is an income investor's dream stock.

• The master limited partnership has solid growth prospects thanks to rising demand for natural gas and natural gas liquids.

• Enterprise's valuation is attractive, too.

• 10 stocks we like better than Enterprise Products Partners ›

I first initiated a position in Enterprise Products Partners (NYSE: EPD) more than two years ago. How has that investment fared so far? Not bad. The midstream energy company has generated a total return of roughly 45%.

Granted, that performance lags behind the S&P 500's total return of 56% during the same period. However, one thing I could count on, rain or shine, with Enterprise Products Partners was (and is) its juicy distribution.

How does the stock look today? Absurdly good, in my opinion.

First of all, Enterprise Products Partners is an income investor's dream stock. It currently offers a forward distribution yield of 6.7%. The master limited partnership (MLP) doesn't have to produce much in the way of unit price appreciation to deliver a solid total return.

What's more, Enterprise boasts an outstanding track record of distribution hikes. The company has increased its distribution for 26 consecutive years. It has also paid $1.2 billion in "invisible" distributions since its initial public offering in 1998 via unit buybacks.

Building this impressive record wasn't easy. Enterprise Products Partners faced multiple big challenges through the years, including the financial crisis of 2007 through 2009, the oil price collapse of 2015 through 2017, and the COVID-19 pandemic of 2020 through 2022. However, it was able to generate strong cash flow per unit to fund its distributions during every crisis.

Some rivals were forced to resort to selling assets to cover their distributions during tough periods. Not Enterprise Products Partners. It's the only midstream energy company that has been able to grow its adjusted cash flow from operations (CFFO) per unit and reduce unit count without any material asset sales.

Today, Enterprise Products Partners operates more than 50,000 miles of pipeline. It owns 43 natural gas processing trains and 26 fractionators, which separate the components of hydrocarbons. In addition, the MLP can store over 300 million barrels of liquids and has 20 deepwater docks.

I mentioned earlier that Enterprise Products Partners' total return hasn't been as high as the S&P 500's since I bought it. If we looked back over the last five years, though, it would be a different story. Enterprise has also narrowly outperformed the S&P 500 in total return so far in 2025.