Enterprise Products Partners Faces Stock Decline Amid Upcoming Growth Phase
Enterprise Products Partners (EPD) has seen its units slump nearly 12% from their April peak, pushing its distribution yield above 7%. The Houston-based midstream energy company remains fundamentally strong, reporting a 7% increase in distributable cash FLOW to $1.9 billion in Q2—enough to cover its distribution with a 1.6x coverage ratio.
Despite market pessimism, EPD is poised for a growth spurt with $6 billion in organic expansion projects nearing completion. Two new Permian Basin gas processing plants (Orion and Mentone West) have already come online. The disconnect between operational performance and unit price presents a potential opportunity for yield-seeking investors.