EPD Hikes Quarterly Distribution Again
Investors love energy stocks because they can provide big dividends. Unfortunately, energy stocks can also be volatile, rising and falling on the price of crude, where we’re at in the economic cycle, and geopolitical tensions.
Right now though, the Energy sector is the place to be. Energy is the top performing sector year to date (+40.8%) and on an annual basis (40.7%). Wars in the Middle East have a tendency to do that.
One energy play that has been rewarding buy and hold investors with excellent long-term capital appreciation and a reliably growing dividend no matter what’s going on with the price of oil, is Enterprise Products Partners L.P. (NYSE:EPD).
Not only has it raised its annual distribution for the last 27 years, making it a dividend aristocrat, but EPD units are also thumping the broader market and trading near record levels.
About Enterprise Products Partners L.P.
As a midstream oil and gas limited partnership, Enterprise is responsible for moving natural gas, natural gas liquids, crude oil, and petrochemical & refined products. And it gets paid whether drillers are making money or not. That’s because it earns a fee for each barrel that gets shipped. (Source: “Investor Deck February 2024,” Enterprise Products Partners L.P.; last accessed October 8, 2026.).
And it has a lot of pipelines: 50,000+ miles of natural gas, NGLs, crude oil, refined products, and petrochemical pipelines.
Enterprise Products’ combined operations also include:
- 300+ millions of barrels (MMBbls) of liquid storage capacity
- 46 natural gas processing plants and 26 fractionators
- 21 deepwater docks handling NGLs, petrochemicals, crude oil, and refined products
- Co-owns the world’s largest ethylene export terminal with capacity of over 2.2 billion pounds per year
Suffice it to say, Enterprise Products has a wide moat business. Even if you wanted to cut into Enterprise’s business, chances are you couldn’t do it. The costs to lay a rival pipeline, processing plants, deepwater docks, and export terminals start in the billions of dollars.
Record Q2 Results
For the second quarter ended June 30, 2026, Enterprise announced that net income increased 28% year-over-year to a record $1.8 billion, or $0.84 per unit. Operational distributable cash flow (DCF) came in at a record $2.3 billion with DCF of $1.1 billion. (Source: “Enterprise Reports Results for Second Quarter 2026,” Enterprise Products Partners L.P., July 30, 2026.)
Adjusted cash flow from operations (CFFO) was up 19% at a record $2.1 billion. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) advanced 17% to a record $2.8 billion.
Enterprise’s payout ratio, which is made up of distributions to common unitholders and partnership common unit buybacks, for the twelve months ended June 30, 2024, was 56% of Adjusted CFFO.
On the operations front, it reported record equivalent pipeline volumes and record marine terminal volumes.
During the quarter, the second phase of its Neches River Terminal in Texas was placed into service.
It also announced plans to construct a new NGL fractionator at its Mont Belivieu area complex.
Plans were also announced to construct a new 300 MMcf/d Gas Processing Plant in the Delaware Basin and a new 300 MMcf/d Gas Processing Plant in the Midland Basin; service is expected to begin in the third quarter of 2028 and the first quarter of 2029, respectively
The company didn’t provide any guidance, but Wall Street analyst’s expect Enterprise Products’ earnings to grow from $2.68 per share in 2026 to $3.05 per share in 2027. (Source: “Enterprise Products Partners L.P. (EPD),” Yahoo!Finance, last accessed October 8, 2026.)
Dividend Aristocrat Hikes Payout For 27th Consecutive Year
Thanks to its reliable, strong free cash flow ($2.97 billion in 2025, $3.57 billion in 2025) Enterprise has been able to prove shareholders with a growing annual distribution.
Enterprise Products Partners LP became a dividend aristocrat in 2023 after raising its dividends for the 25th straight year. It’s not uncommon for EPD to raise its payout numerous times throughout the year too.
That momentum has continued. In August, it paid out a quarterly distribution of $0.56 per share, that’s up from $0.55 per share in the second quarter and up from $0.545 in the same prior year period. (Source: “Distributions & DRIP,” Enterprise Products Partners L.P., last accessed October 8, 2026.)
This works out to an annual distribution of $2.21 per unit, for a forward dividend yield of 5.92%. That’s almost double the current inflation rate and well above the average dividend yield on the S&P 500 of 1.05%. That’s actually hovering near record lows.
EPD Units Up 20% Year To Date
If you’re a dividend hog you can’t help but be pleased with Enterprise’s 27-year track record of raising its annual dividend. The company’s long-term stock market gains are also something to admire.
Over the last 25 years, with dividends reinvested, EPD stock has returned profits of 1230%. Over the same time frame, the S&P 500 has returned profits of 630% while the Energy Select Sector SPDR Fund (NYSEARCA:XLE) has returned profits of roughly 840%.
That’s with dividends reinvested. Had you opted to take those quarterly payouts in cash, EPD’s total return over the last 25 years slips to 193%. That goes to show the power of reinvesting dividends and compounding.
The company’s near-term gains have been impressive too. On May 20, EPD stock hit a new record intra-day high of $40.16. It continues to trade near those records, and is, as of this writing, up 20% year-to-date and 24% year-over-year.
The outlook for EPD stock remains robust too, with Wall Street analyst’s providing a 12-month share price target range of 14.33 to $46.00 per share. This points to potential upside of roughly 12% to 25%.
Chart courtesy of StockCharts.com
The Lowdown on Enterprise Products Partners L.P.
Right now, you need to find a reason not to like Enterprise Products Partners L.P. The company continues to generate excellent financial results, organically expand its operations, and make strategic acquisitions.
This has allowed it to increase its reliably growing, high yield dividend for 27 years. If history is any indicator, Enterprise Products should continue to raise its annual distribution. It has a long history of strong cash flow resilience. This includes generating strong cash flow during the Financial Crisis (2007/2008), oil collapse (2014-2017), and COVID-19 Pandemic (2020/2021).
That’s great news for retail and institutional investors. Institutional investors hold 25.63% of all outstanding shares. Three of the top 1,722 institutional holders include Alps Advisors Inc., Invesco Ltd., and Blackstone Inc. (Source: “Enterprise Products Partners L.P.,” Yahoo!Finanace, last accessed October 8, 2026.)