Here's Why Enterprise Products Partners Stock Is a Buy Before April 29

Enterprise Products Partners (NYSE: EPD), one of the largest midstream natural gas and crude oil pipeline companies in America, is usually considered a slow-growth stock. But over the past five years, this boring but reliable income stock rallied about 93%. If we include its reinvested distributions, it generated a total return of 187%. During that same period, the S&P 500 only rallied 90% and delivered a total return of 105%.

Those market-beating gains are impressive, but some investors might be reluctant to buy Enterprise's stock in this wobbly market. However, I believe it's worth buying ahead of its next earnings report (expected on April 29) for five simple reasons.

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1. It's resistant to macro headwinds

Enterprise operates more than 50,000 miles of pipeline, which have a combined storage capacity of over 300 million barrels of oil, across the United States. It generates its revenue by charging upstream extraction companies and downstream refining companies "tolls" to use its pipes. That evergreen business model is well-insulated from tariffs, inflation, and other macro headwinds because it isn't affected by fluctuating gas prices.

Instead, it only needs natural gas and crude oil to continuously flow through its pipes to generate consistent revenues and profits. That's why it plans to expand its pipelines across the Permian Basin, the Neches River, Morgan's Point, and other gas-rich locations this year, even as unpredictable tariffs and trade wars rattle the global markets.

2. It will profit from President Trump's energy policies

Pipeline companies and other fossil fuel companies often face fierce opposition from environmental groups and government regulators. However, the Trump administration plans to relax those regulations to curb America's dependence on foreign resources. Those friendlier policies should generate strong tailwinds for Enterprise and its industry peers.

3. It pays a higher yield than most fixed-income plays

Enterprise is a master limited partnership (MLP), which blends the tax advantages of a private partnership with the liquidity of a publicly traded stock. MLPs report their profits in earnings per unit (EPU) instead of the traditional earnings per share (EPS). So as long as an MLP's EPU exceeds its distributions per unit, its payout should remain sustainable.

From 2014 to 2024, Enterprise's fully diluted EPU expanded at a compound annual growth rate (CAGR) of 6% from $1.47 to $2.69. That easily covered its distributions of $2.10 per unit in 2024. It raised that distribution to $2.14 per unit earlier this month. That marked its 27th consecutive year of increased distributions.

For 2025, analysts expect Enterprise's EPU to rise 8% to $2.91 and easily cover its distributions. At its current price of $30, that equals a forward distribution yield of 6.9% -- which is significantly higher than the 10-year Treasury's yield of 4.3%. So as interest rates continue to decline, Enterprise should attract more income-oriented investors.

4. It looks cheap relative to its growth

From 2024 to 2027, analysts expect Enterprise's EPU to grow at a CAGR of 6%. Based on that outlook, it looks like a bargain at 10 times this year's EPU. By comparison, its industry peer Energy Transfer trades at 12 times this year's EPU. Canada's Enbridge, which isn't an MLP, trades at 20 times forward earnings.

5. It's less controversial than other pipeline companies

Enterprise still faces constant pressure from environmental groups. But it's arguably less controversial than Energy Transfer and Enbridge, which are often associated with the Dakota Access Pipeline and the Line 5 pipeline, respectively. Native American groups fiercely opposed the Dakota Access Pipeline's construction in 2016 and 2017, while the Line 5 pipeline's construction in Michigan was repeatedly halted due to environmental concerns.

Why should you invest in Enterprise Products Partners today?

Enterprise's resistance to tariffs, high distributions, and low valuations all make it a great stock to buy today. Therefore, it's smart to accumulate this MLP before it attracts even more attention with its next earnings report.

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Leo Sun has positions in Energy Transfer. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.