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Key Takeaways:
- EPD offers a 7% dividend yield, backed by consistent free cash flow and a conservative payout strategy.
- Over the next 2.4 years, analysts expect EPS to grow about 4% annually with dividends expected to grow about 5% annually.
- TIKR’s valuation model suggests 24% total return potential by 2027, driven by stable growth and strong energy infrastructure demand.
Enterprise Products Partners is one of the largest and most dependable names in the energy infrastructure space.
The company owns a massive network of pipelines, storage tanks, and processing facilities that move and process natural gas, NGLs, and crude oil across North America.
Unlike producers, EPD doesn’t rely on commodity prices to generate profits. Instead, it earns stable fees from long-term contracts. That’s helped it generate consistent earnings through different market cycles, and it’s why the company has been able to steadily raise its dividend even in volatile energy environments.
Shares currently trade around $31, and while they’ve bounced around over the past year, EPD’s core appeal remains unchanged: reliable income backed by hard assets and high margins.
Analysts Think the Stock is Undervalued Today
EPD shares currently trade around $31, but based on TIKR’s guided valuation model, which uses analysts’ consensus estimates, the stock could reach about $39 by the end of 2027.
That implies a total return of 24%, or around 9% per year. The model already includes EPD’s generous 7% dividend yield, which means that investors would make the bulk of their return in reliable dividends.
The stock doesn’t look expensive today either. It’s trading at around 11.5x earnings, which is the same multiple we used in the valuation.
With strong margins, steady earnings growth, and a well-covered dividend, EPD stands out as a reliable pick for long-term investors seeking income and stability.
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A 7% Yield From a Durable Energy Network
EPD’s forward dividend yield sits at around 7%, which is slightly below its 5-year average of 7.8% and near the lowest level the stock has offered in recent years.
This is mainly because the stock has climbed steadily over the past few years, while the dividend has grown modestly. That gap between a rising stock and a slowly growing dividend has pushed the yield lower, but it still remains among the highest dividend yields in the large-cap infrastructure space.
The underlying business remains strong, and today’s lower yield may still offer a solid entry point for investors looking for stable income backed by hard assets.
EPD’s Dividend Expected to Rise 5% Annually Through 2027
Enterprise Products is expected to earn $2.72 per share in 2025 and pay out $2.10 in dividends, resulting in a solid 77% payout ratio. That payout ratio is right in line with its historical range and backed by reliable cash flow.
By 2027, analysts see earnings rising to $3.06 per share and the dividend climbing to $2.42. That works out to modest annual growth of about 4% for EPS and nearly 5% in dividends, with the payout ratio holding steady near 79%.
Earnings growth is expected to come from continued expansion in petrochemical exports, natural gas transportation, and NGL processing, especially across the Gulf Coast, where EPD has a competitive advantage in scale and infrastructure reach.
The company is also positioned to benefit from rising global demand for U.S. energy exports, supported by its extensive pipeline network, storage capacity, and marine terminals.
EPD has raised its distribution for 26 consecutive years, reinforcing its reputation as a reliable income provider with long-term staying power in the midstream energy space.
See Enterprise Products Partners’ full growth forecast and analyst estimates. (It’s free) >>>
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
