Enterprise Products Partners (NYSE:EPD) has been an excellent company to buy and hold over the years. Since going public nearly two decades ago, Enterprise has increased its distribution to investors 64 times overall, including in each of the last 55 quarters. That steadily growing income stream has helped fuel a total return of more than 1,700% over that time frame, versus just a 250% total return from the S&P 500.

While it will be tough for the company to repeat that level of outperformance in the decades to come, Enterprise does appear to have the fuel to continue beating the market, making it a great income stock to consider buying.

Several pipelines with the sun shining around them

Image source: Getty Images.

Near-term upside

While Enterprise Products Partners has outperformed the market throughout its history, it has hit a rough patch in recent years. The company has only delivered a total return of less than 1% over the past three years, which has vastly trailed the S&P 500's nearly 38% total return over that time frame. That slump is mainly because Enterprise's cash flow slipped from its peak in 2014, due to the impact the oil market downturn had on the volumes flowing through its midstream network.

Cash flow did finally bottom out in 2016 and has rebounded over the past year, thanks to an improvement in volumes as a result of higher oil prices and the recent completion of several expansion projects. However, Enterprise has yet to feel the full impact of the roughly $5 billion of projects it has completed over the past year, since many just began commercial service in the second quarter of 2018, and the company should experience an even bigger uptick in cash flow over the next few quarters. That growing cash flow stream should help boost Enterprise's unit price, especially since its valuation and yield are at compelling levels compared to the historical average:

EPD Dividend Yield (TTM) Chart

EPD Dividend Yield (TTM) data by YCharts. EV = enterprise value; EBITDA = earnings before interest, taxes, depreciation, and amortization.

While Enterprise isn't dirt cheap, and its yield isn't as high as it was, it still offers an attractive payout for a fair price.

Plenty of growth still coming down the pipeline

While 2018 will be a big year for Enterprise Products Partners, the company has plenty more growth up ahead. The energy infrastructure giant has another $5.3 billion of major expansion projects under construction that should enter service and start generating cash flow over the next two years.

Meanwhile, the company has experienced a "noticeable pickup in discussions and negotiations" on new projects, said CEO Jim Teague on the first-quarter conference call, which should yield more announcements of organic growth projects later this year. The company will likely continue announcing a steady stream of expansion projects in the coming years, given the need for new energy infrastructure in North America. According to a recent study, energy companies in the U.S. and Canada need to invest about $26 billion per year on new energy-related infrastructure through 2035 to keep up with supply and demand. Since Enterprise operates one of the largest integrated systems in the country, it's well-positioned to win a considerable share of the industry's expansion projects. Meanwhile, with one of the strongest financial profiles in the sector, it has enhanced access to the funding needed to expand its network while still paying a growing distribution.

All this growth points to one thing

With near-term growth on the horizon from recently completed expansion projects, and ample upside ahead from those under construction and in the works, Enterprise Products Partners' cash flow should head much higher in the coming years. That will give the company the money to continue increasing its payout, which has been one of the driving factors in its ability to create so much value for investors throughout its history. While the growth coming down the pipeline doesn't guarantee that Enterprise will outperform the market from here, it does increase the company's odds. In my opinion, that makes it an ideal option to buy and hold for the long haul.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.