Enterprise Products Partners L.P. (EPD): A Bull Case Theory 

We came across a bullish thesis on Enterprise Products Partners L.P. on Valueinvestorsclub.com by rhubarb. In this article, we will summarize the bulls’ thesis on EPD. Enterprise Products Partners L.P.’s share was trading at $31.65 as of September 10th. EPD’s trailing and forward P/E were 11.85 and 10.68 respectively according to Yahoo Finance.

Enterprise Products Partners (EPD) is a master limited partnership (MLP) that owns and operates an extensive, vertically integrated system of pipelines, processing plants, storage, and export terminals across NGLs, crude, natural gas, petrochemicals, and refined products. Its scale and connectivity, anchored by irreplaceable complexes in Mont Belvieu and the Houston Ship Channel, provide customers—including all major oil companies—with market access, flexibility, and reliability that smaller operators cannot replicate.

With strong exposure to NGLs, EPD benefits from the structural feedstock advantage of the U.S. petrochemical industry, serving all domestic ethylene crackers and 90% of refining capacity east of the Rockies, while maintaining a dense footprint in the low-cost Permian Basin. Governance is a distinguishing strength: insiders, led by the Duncan family, own 32% of common units, there are no incentive distribution rights, and management invests with a long-term mindset, supported by a marketing team adept at capitalizing on market dislocations.

At around $31 per unit, EPD offers a 7% yield, covered 1.7x by distributable cash flow (DCF), leaving room for reinvestment at attractive returns. Since 2005, reinvested capital has generated a 12% pre-tax ROIC, fueling 26 consecutive years of distribution growth. The balance sheet is conservative with 3.1x leverage, long-term fixed debt averaging 17.7 years, and a 4.7% coupon. Looking ahead, $6 billion of projects set to come online in 2025—including pipelines, fractionation, and export terminals—should add $700 million of EBITDA. With a 7% yield plus distribution growth, EPD offers 10.5%+ expected annual returns, supported by durable assets, disciplined capital allocation, and strong stewardship.

Previously we covered a bullish thesis on Kinder Morgan, Inc. (KMI) by Gregg Jahnke in October 2024, which highlighted the company’s project backlog growth, exposure to AI-driven demand and reshoring, and potential regulatory tailwinds. The company’s stock price has appreciated approximately by 10.35% since our coverage. The thesis still stands as KMI’s backlog supports growth. Rhubarb shares a similar view on Enterprise Products Partners (EPD) but emphasizes governance strength and reinvestment returns.

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Disclosure: None.