Enterprise Products Partners (EPD 0.56%) has richly rewarded investors throughout its history. Not only has the midstream company increased its distribution to investors for 20 straight years -- including in each of the past 58 consecutive quarters -- but it has also significantly outperformed the market over that time frame. Overall, the master limited partnership (MLP) has generated a more than 1,800% total return, which has obliterated the roughly 260% total return of the S&P 500.

I firmly believe this outperformance can continue in the coming years. Here are three reasons I think Enterprise Products Partners is a great buy.

Blocks spelling out Buy on a man's hand.

Image source: Getty Images.

1. It trades at a compelling valuation

Enterprise Products Partners is coming off a record year. The midstream giant generated $6 billion, or $2.74 per unit, of distributable cash flow (DCF) in 2018, which was up 33% from 2017's level. However, despite that big uptick in cash flow, the company's unit price has increased by only about 4% over the past year. As a result, the company now sells for around 10 times DCF, which is well below the mid-teens multiple Enterprise and its peers have traditionally fetched. That discount should attract the attention of value-focused investors.

Enterprise certainly believes the market has undervalued its business, which recently led it to launch a $2 billion unit-repurchase program, enough to retire 3.3% of its outstanding units at the current trading price. That buyback gives the company "another 'tool in the toolbox' to opportunistically return capital to investors," according to CEO Jim Teague.

2. The distribution is stronger than ever

One of the main draws of Enterprise Products over the years has been its lucrative distribution to investors. That payout currently yields 6.2%, which is more than three times that of the average stock in the S&P 500. That income stream alone should catch the eye of income-seeking investors.

Two factors, however, make that payout even more attractive. First, it's on as solid a foundation as investors will find. For starters, Enterprise Products Partners generates very predictable cash flow, since long-term contracts support about 85% of its earnings. Meanwhile, the company hauled in enough money last year to cover its payout by a comfortable 1.5 times, up from about 1.2 in previous years. That left it with a significant amount of excess cash -- roughly $2.2 billion -- to reinvest into expansion projects, which covered more than half of its growth-related spending last year.

The second factor that makes Enterprise Products Partners' distribution so attractive is that the company continues to increase it every quarter. The MLP plans to continue that trend in 2019, aiming to boost the payout by 2.3% overall compared to last year's level. That distribution growth alone could fuel market-beating returns considering that dividend growth stocks have historically outperformed all others. 

3. Ample growth prospects ahead

One of the main factors driving both DCF and distribution growth is the expansion projects Enterprise Products Partners completed last year. Overall, the company invested $4.5 billion to increase its midstream footprint in 2018, while bringing $1.9 billion of new assets online. The company expects to spend another $3.5 billion to $3.9 billion on expansions this year as it works to complete five major projects that will help further boost cash flow as they start service. Overall, the company has $6.7 billion of projects in its backlog, which should support healthy growth for the next couple of years, making Enterprise an attractive option for growth-focused investors.

Meanwhile, CEO Jim Teague noted in the company's fourth-quarter earnings release that "our integrated footprint of assets and customer relationships continue to provide new opportunities for growth projects that are currently under development." As the company secures those expansions, they will increase the clarity of its long-term growth prospects.

Check out the latest Enterprise Products Partners earnings call transcript.

The trifecta

With cash flow expanding at a much faster rate than Enterprise' unit price, the company trades at a compelling valuation. Add in its rock-solid high-yielding distribution and compelling growth prospects, and this midstream company is a great all-around buy these days.