It began, as these things often do, with a need for something…reliable. A small, steady income in a world obsessed with fleeting fortunes. Several years ago, I acquired a stake in Enterprise Products Partners L.P. (EPD +0.47%). It hasn’t been a source of exhilaration, certainly, but a quiet competence has marked its performance. And I’ve found myself, rather inexplicably, adding to it over time.
A Modest Distribution
The yield, around 6%, is…acceptable. Not a spectacular figure to set the heart racing, but enough to warrant attention. I don’t, at present, rely on the distribution. One shouldn’t, really. It feels…precarious, to build a life on such things. Instead, I reinvest. A small act of faith, perhaps, in a world where faith is a dwindling commodity. With a yield of this magnitude, even a modest appreciation in the unit price offers a reasonable return. Though one shouldn’t expect miracles.
The company has, I note, increased its distribution for 27 consecutive years. A remarkable feat, in a world where consistency is so rare. Whether this streak will continue, of course, is another matter. The future, as always, remains stubbornly opaque. But it’s a comforting thought, nonetheless.
A History of…Endurance
The energy sector, as everyone knows, is a tempestuous sea. But Enterprise Products Partners, at least, appears to have weathered the storms with a certain stoicism. A pipeline, after all, is a rather unromantic undertaking. It simply exists, quietly transporting its contents from one place to another.
Over the past two decades, the company has managed to generate durable cash flow. An impressive achievement, considering the various crises that have come and gone – the financial turmoil of 2008, the oil price collapse, even the recent pandemic. It’s as if the company has simply…persisted, while the world around it has convulsed.
Around 90% of its long-term contracts are protected from inflation. A small victory, perhaps, in a world where prices seem to drift ever upwards. Its balance sheet is strong, boasting an A- credit rating. Not a cause for celebration, but a reassuring sign of stability.
Prospects, Dimly Seen
Last year, Enterprise Products Partners reported adjusted cash flow of $8.7 billion. A substantial sum, certainly. And earnings before interest, taxes, depreciation, and amortization reached $2.7 billion in the fourth quarter. But numbers, in the end, are merely numbers. They tell us little about the human condition.
Growth, it seems, will be modest in the coming year, perhaps around 3%. Not a figure to inspire grand ambitions. But the company is bringing several assets online. The CEO spoke of double-digit growth in 2027. One can only hope.
The build-out of data centers, driven by the insatiable appetite for artificial intelligence, will likely increase demand for natural gas. Enterprise Products Partners, with its vast network of pipelines, is well-positioned to benefit. Though whether this will translate into significant returns remains to be seen. The future, as always, is shrouded in uncertainty. One accumulates, one observes, and one waits. The pipeline continues to flow, and life, in its quiet, unassuming way, goes on.
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2026-02-21 12:52