I first invested in Enterprise Products Partners L.P. (EPD +0.74%) several years ago. It's been a winner for me, especially based on total returns. But I didn't stop at only one purchase of the midstream energy stock. Here are three reasons why I can't stop buying this passive income powerhouse.
1. A fantastic distribution
Enterprise Products Partners pays a distribution that yields roughly 6%. I don't rely on the distribution for passive income now, but I plan to do so in the future. Instead, I reinvest the cash I receive from owning units of this master limited partnership (MLP) stock. With a 6% yield, it doesn't take much unit-price appreciation to achieve double-digit total returns.
The ultra-high yield isn't the only thing that I like about Enterprise Products Partners' distribution, though. The MLP has increased its distribution for 27 consecutive years. I'm confident the company will keep that streak going for years to come.
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2. A history of stability
The oil and gas industry can be highly volatile. However, Enterprise Products Partners is a pipeline stock with a history of stability.
Over the last 20 years, Enterprise Products Partners has consistently generated durable cash flow. That's an impressive feat, considering the period included the financial crisis of 2007 through 2009, the oil price collapse of 2015 through 2017, and the COVID-19 pandemic of 2020 through 2022.
Enterprise's business is largely recession-resistant. Around 90% of its long-term contracts are protected from inflation through escalation provisions. Its balance sheet is strong, as evidenced by Enterprise being the only midstream energy infrastructure company with an A- credit rating (indicating low credit risk).
NYSE: EPD
Key Data Points
3. Solid growth prospects
Enterprise Products Partners generated a record $8.7 billion of adjusted cash flow from operations last year. The company also reported record earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.7 billion in the fourth quarter of 2025. What's even better, though, is that Enterprise has solid growth prospects over the next several years.
Granted, growth will likely be only modest in 2026, with cash flow and EBITDA increasing by around 3%. However, the midstream company is bringing several assets online this year. Enterprise's co-CEO, Jim Teague, said during the fourth-quarter earnings call, "We expect to see double-digit growth in 2027 once these assets reach full utilization."
The continued build-out of data centers hosting artificial intelligence (AI) systems will be a key growth driver of natural gas demand over the next five years. Enterprise Products Partners, with its 50,000+ miles of pipeline, is poised to be a key beneficiary of this growth.
