Enterprise Products Partners (EPD +0.81%) is an income juggernaut. The master limited partnership's (MLP) current yield of 6.3% is several times higher than the S&P 500's 1.1% yield. The energy midstream company has increased its payout for 27 straight years, a trend that should continue.
Here's a look at how much money you'd need to invest in the high-yielding MLP (which sends a Schedule K-1 Federal tax form each year) to generate $1,000 of annual passive income.
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The math to $1,000 in annual passive income
Enterprise Products Partners declared its most recent quarterly distribution payment in January. The MLP set the rate at $0.55 per unit ($2.20 annualized). That was a 2.8% increase compared to the prior-year period.
At its current rate, you'd need to own 454.5 units of the MLP to generate $1,000 in passive income each year. That would cost about $15,900 at the company's recent unit price of around $35. While that's a chunk of change, it's a lot less money than you'd need to invest in a lower-yielding asset to generate the same amount of passive income. For example, you'd need to invest over $87,700 into an S&P 500 index fund to generate $1,000 in annual dividend income at its current yield.
NYSE: EPD
Key Data Points
A rock-solid income stock
While many high-yielding dividend stocks have higher risk profiles, that's not the case with Enterprise Products Partners. The MLP generated $7.9 billion of operational distributable cash flow in 2025. That was enough to cover its high-yielding distribution by a comfortable 1.7 times, enabling Enterprise to retain $3.2 billion in cash to reinvest in the partnership.
The company spent a total of $5 billion on expansion initiatives last year, including $4.4 billion on growth capital projects and $632 million on acquisitions. It funded the difference with its fortress balance sheet. Enterprise Products Partners ended the year with a low 3.3 times leverage ratio, backing its top-tier credit rating (it's the only pipeline company with an A- credit rating).
Enterprise Products Partners expects to invest $2.5 billion to $2.9 billion in growth capital projects this year and between $2 billion and $2.5 billion in 2027. As a result, its free cash flow will grow due to declining capital spending and incremental cash flow as those projects enter commercial service. That will enable the MLP to continue increasing its distribution, repurchase additional common units, and further strengthen its already elite balance sheet.
An excellent income investment
Enterprise Products Partners has been an income-producing machine over the years. The MLP pays a high-yielding distribution backed by a rock-solid financial profile. That gives it the financial resources to invest in its growth while also continuing to increase its lucrative distribution. These features make it one of the most bankable income investments in the energy sector.
