This is a step-by-step stock review to answer the question, is Enterprise Products Partners (EPD) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Enterprise Products Partners (EPD) stock a good buy?
- Enterprise Products Partners Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Enterprise Products Partners (EPD) stock a good buy?
1.Enterprise Products Partners Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 1968: Started by Dan L. Duncan in Houston, Texas, as a small enterprise focused on natural gas liquids (NGLs).
- Early Growth: Expanded its operations rapidly in the 1970s and 1980s, becoming a significant player in the midstream energy sector.
- IPO in 1998: Went public on the New York Stock Exchange under the ticker symbol EPD.
- Infrastructure Expansion: Developed a vast network of pipelines, storage facilities, and processing plants across North America.
- Strategic Acquisitions: Enhanced its asset base through key acquisitions, including GulfTerra in 2004 and TEPPCO Partners in 2009.
- Diverse Services: Provides a wide range of services including natural gas gathering, processing, transportation, storage, and petrochemical production.
- Commitment to Growth: Continually invests in new projects and expansions to meet the growing demand for energy infrastructure.
- Financial Strength: Known for strong financial performance, stability, and consistent distribution growth to shareholders.
- Safety and Sustainability: Focuses on safe operations and sustainability practices, aiming to reduce environmental impact and enhance community relations.
- Industry Leadership: Recognized as a leader in the midstream energy sector, with a reputation for operational excellence and reliability.
- Future Vision: Continues to pursue strategic opportunities and technological advancements to maintain its leadership position and drive future growth.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 55
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Enterprise Products Partners makes money:
- Midstream Services: Provides transportation, storage, and processing for natural gas, crude oil, refined products, and petrochemicals.
- Natural Gas Services: Offers gathering, processing, and transportation of natural gas.
- Crude Oil Services: Provides gathering, transportation, and storage for crude oil.
- NGL Services: Processes and transports NGLs like ethane, propane, and butane.
- Export Terminals: Operates terminals for exporting crude oil, refined products, and petrochemicals.
- Pipelines and Infrastructure: Manages pipelines and infrastructure across major US regions.
- Storage Facilities: Owns storage facilities for oil, products, NGLs, and petrochemicals.
- Fractionation: Provides fractionation services for NGL distribution.
- Marketing and Trading: Engages in energy commodities marketing and distribution.
- Customer Relationships: Serves producers, refiners, petrochemical makers, and retail consumers.
- Environmental and Safety Commitments: Emphasizes stewardship and operational safety.
- Revenue Streams: Earns from contracts, tolling, and commodity sales.
Enterprise Products Partners maximizes earnings with diverse energy services.
Here are a few of the other companies that Enterprise Products Partners has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Acadian Acquisition, LLC
- Acadian Consulting, LLC
- Acadian Gas LLC
- Acadian Gas Pipeline System
- Belvieu Environmental Fuels
- Cajun Pipeline Company, LLC
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Enterprise Products Partners stacks up against other companies.
- Dorian LPG Ltd. (LPG) – 95
- Teekay Tankers Ltd. (TNK) – 94
- Genesis Energy, L.P. (GEL) – 84
- ONEOK, Inc. (OKE) – 78
- Euronav NV. (EURN) – 72
- Enterprise Products Partners L.P. (EPD) – 55
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Financial Growth: W. Randall Fowler played a key role in driving significant financial growth for Enterprise Products Partners, contributing to consistent revenue and earnings increases.
- Strategic Expansion: Oversaw strategic expansions, including the development and acquisition of new pipeline and processing infrastructure, enhancing the company’s asset base.
- Operational Efficiency: Improved operational efficiencies and cost management, resulting in better profit margins and operational performance.
- Project Execution: Successfully executed major capital projects, including pipelines, storage facilities, and processing plants, ensuring timely and on-budget completion.
- Market Leadership: Strengthened Enterprise Products Partners’ position as a leading midstream energy services provider, maintaining a strong market presence.
- Financial Stability: Maintained a strong balance sheet and credit ratings, ensuring financial stability and resilience.
- Distribution Growth: Achieved consistent growth in cash distributions to unitholders, reflecting the company’s robust financial health.
- Sustainability Initiatives: Promoted sustainable practices within the company, focusing on environmental, social, and governance (ESG) aspects.
- Risk Management: Enhanced risk management practices, ensuring the company effectively navigated market volatility and industry challenges.
- Corporate Governance: Improved corporate governance practices, fostering transparency and accountability within the organization.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Enterprise Products Partners (EPD) is 62/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Enterprise Products Partners (EPD) stock a good buy?
Some of the top questions investors can have is Enterprise Products Partners (EPD) stock a good buy or should I buy Enterprise Products Partners (EPD) stock?
Enterprise Products Partners is a strong investment opportunity, particularly for those seeking stable, long-term returns in the energy sector. As one of the largest midstream energy companies, it benefits from a diverse portfolio of assets, including pipelines, storage facilities, and processing plants. This diversification provides a steady revenue stream and reduces risk.
Key strengths include its strategic expansion projects, strong financial health, and consistent distribution growth, which make it appealing to income-focused investors. The company’s robust cash flow and conservative financial management further enhance its stability.
However, potential investors should consider risks such as fluctuating commodity prices, regulatory changes, and environmental concerns impacting the energy industry. Despite these challenges, Enterprise Products Partners’ solid market position, comprehensive asset base, and reliable income generation make it a compelling choice for those seeking exposure to the midstream energy sector.
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To truly know if Enterprise Products Partners is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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