Enterprise Products Partners (EPD 0.45%) stands out for its big-time yield. The master limited partnership's (MLP) distribution currently yields 7.6%. That's well above average, considering the S&P 500's average dividend yield is 1.7%. 

Despite its much higher yield, the MLP remains a rock-solid option for those seeking stable income. That was evident in its third-quarter earnings report.

As steady as it gets

Enterprise Products Partners has a low-risk business model. The midstream energy giant primarily generates fee-based income as oil and natural gas flow through its pipeline network and related assets. That helps insulate it from the volatility of oil and natural gas prices, enabling it to produce relatively steady cash flow under any market conditions.

That stability was on full display during the third quarter. Enterprise Products Partners produced nearly $1.9 billion of distributable cash flow, roughly identical to the year-ago period. Meanwhile, operating cash flow increased by about $70 million to over $2.1 billion. That stability came despite some challenges during the period. 

The company's diversified business model helped offset those headwinds. As co-CEO Jim Teague commented in the earnings press release:

We handled record volumes across our midstream system including our liquids pipelines, natural gas pipelines, NGL [natural gas liquids] fractionators and marine terminals. In total, our pipelines transported 12.2 million equivalent BPD and our marine terminals handled 2.1 million BPD of NGLs, crude oil, refined products and petrochemicals. These record volumes coupled with lower systemwide utility costs offset the impact of lower natural gas gathering and processing margins due to a decrease in natural gas and NGL prices compared to the third quarter of 2022. Strong international demand for high octane motor gasoline additives led to record gross operating margin in our octane enhancement business, which largely mitigated the challenges of lower utilization rates at our two propane dehydrogenation ("PDH") facilities.

As Teague pointed out, Enterprise benefited from record volumes flowing through its midstream network during the period. That helped offset the impact of lower natural gas and NGL prices and weaker utilization rates at its PDH facilities. The MLP put itself in a position to capture those strong volumes by completing several expansion projects over the past few quarters. Enterprise placed $2.7 billion of projects into service during the third quarter alone, including its second PDH facility. These new investments position it to continue capturing higher volumes and cash flow in the future.

A financial fortress

Enterprise Products Partners' solid performance in a turbulent period enabled it to generate more than enough cash to cover its high-yielding payout. The MLP's distribution coverage ratio was a very comfortable 1.7 in the third quarter. That allowed it to retain $773 million in excess free cash, boosting its total to $3.2 billion over the last 12 months. 

That excess cash enabled Enterprise Products Partners to fund its capital projects while maintaining an elite balance sheet. Capital spending was $826 million during the third quarter and has totaled $2.3 billion through the first nine months of this year. The MLP has covered that entire amount with retained cash flow.

It has even generated a little excess, which it returned to investors by repurchasing its common units. While the MLP didn't make any repurchases during the third quarter, it bought back 3.6 million units for $92 million this year. It has now utilized 41% of its $2 billion repurchase program.

Enterprise Products Partners can return that additional cash to investors because it has an elite balance sheet. Its leverage ratio was 3.0 at the end of the third quarter, within its target range of 2.75 to 3.25. That gives it lots of financial flexibility.

The company's strong cash flow, healthy coverage ratio, and excellent balance sheet allowed it to raise its distribution by 5.3% during the third quarter. That marked its 25th straight year of increasing its payout.

Built for producing steady income

Enterprise Products Partners built a durable business. The company generates steady cash flows during more challenging market conditions, and those cash flows grow over time as it expands its portfolio of stable income-producing infrastructure. That allows it to routinely increase its already high-yielding distribution. Add in its extremely conservative financial profile, and this MLP is an ideal option for income-seeking investors.