How Will Oil Price Sensitivity Impact Enterprise Products' Business?
Enterprise Products Partners LP EPD relies heavily on oil prices since it has a strong presence in the Permian. Shippers utilize EPD's pipeline networks to transport crude from the most prolific basin of the United States to the end market or refineries. This confirms that Enterprise Products' midstream business is sensitive to oil prices. For the long term, EPD generally expects the price of West Texas Intermediate (WTI) to hover around $65 per barrel.
However, on the earnings call for first-quarter 2025, the partnership expressed a more cautious outlook that the oil price will trade at $60 or even $55 per barrel in the next three to five years. The partnership mentioned that at $55 to $60 per barrel, producers are generally capable of maintaining current production levels and mostly stop investing in new drilling.
Thus, it seems that EPD expects oil production to slow down due to declining oil prices. Once there is a slowdown in volumes, there will be lower demand for the partnership's pipeline network, which could hurt its revenue generation in the coming years.
Are Operations of WMB & KMI Also Exposed to Crude Price?
Although they are midstream energy majors, the businesses of Kinder Morgan KMI and Williams WMB are mostly exposed to natural gas prices rather than oil prices.
This is because KMI's pipeline network, which transports natural gas and spans across 66,000 miles, is among the largest in the United States. Kinder Morgan's pipeline network is responsible for transporting roughly 40% of the natural gas consumed in the domestic market.
Like KMI, Williams is also responsible for transporting huge volumes of natural gas. Notably, WMB is responsible for carrying a third of the nation's natural gas through its pipeline network that spans over 33,000 miles.
EPD's Price Performance, Valuation & Estimates
Units of EPD gained 20.8% over the past year, outpacing the 18.5% improvement of the composite stocks belonging to the industry.
One-Year Price Chart
From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.27x. This is below the broader industry average of 11.54x.
The Zacks Consensus Estimate for EPD's 2025 earnings hasn't been revised over the past seven days. EPD currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Williams Companies, Inc. (The) (WMB): Free Stock Analysis Report
Kinder Morgan, Inc. (KMI): Free Stock Analysis Report
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CTV News
41 minutes ago
- CTV News
Elon Musk renews his criticism of Trump's big bill as Senate Republicans scramble to pass it
Elon Musk attends a news conference with President Donald Trump in the Oval Office of the White House, May 30, 2025, in Washington. (AP Photo/Evan Vucci, File) WASHINGTON — Elon Musk on Saturday doubled down on his distaste for U.S. President Donald Trump's sprawling tax and spending cuts bill, arguing the legislation that Republican senators are scrambling to pass would kill jobs and bog down burgeoning industries. 'The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country,' Musk wrote on X on Saturday ahead of a procedural U.S. Senate vote to open debate on the nearly 1,000-page bill. 'It gives handouts to industries of the past while severely damaging industries of the future.' The Tesla and SpaceX CEO, whose birthday is also Saturday, later posted that the bill would be 'political suicide for the Republican Party.' The criticisms reopen a recent fiery conflict between the former head of the U.S. Department of Government Efficiency and the administration he recently left. They also represent yet another headache for Republican Senate leaders who have spent the weekend working overtime to get the legislation through their chamber so it can pass by Trump's Fourth of July deadline. Musk has previously made his opinions about Trump's 'big, beautiful bill' clear. Days after he left the federal government last month with a laudatory celebration in the Oval Office, he blasted the bill as 'pork-filled' and a 'disgusting abomination.' 'Shame on those who voted for it: you know you did wrong. You know it,' he wrote on X earlier this month. In another post, the wealthy GOP donor who had recently forecasted that he'd step back from political donations threatened to fire lawmakers who 'betrayed the American people.' When Trump clapped back to say he was disappointed with Musk, back-and-forth fighting erupted and quickly escalated. Musk suggested without evidence that Trump, who spent the first part of the year as one of his closest allies, was mentioned in files related to sex abuser Jeffrey Epstein. Musk ultimately tried to make nice with the administration, saying he regretted some of his posts that 'went too far.' Trump responded in kind in an interview with The New York Post, saying, 'Things like that happen. I don't blame him for anything.' It's unclear how Musk's latest broadsides will influence the fragile peace he and the president had enjoyed in recent weeks. The White House didn't immediately respond to a request for comment. Musk has spent recent weeks focused on his businesses, and his political influence has waned since he left the administration. Still, the wealthy businessman poured hundreds of millions of dollars into Trump's campaign in 2024, demonstrating the impact his money can have if he's passionate enough about an issue or candidate to restart his political spending. Though he was silent on Musk, Trump laid on pressure and lashed out strongly at Republican holdouts in the Senate as lawmakers spent hours taking a procedural vote during a rare Saturday evening session. He accused Sen. Thom Tillis of North Carolina of seeking publicity with his no vote and threatened to campaign against the senator's reelection. The legislation narrowly cleared its test vote in the Senate late Saturday evening, allowing senators to begin debate. Ali Swenson, The Associated Press
Globe and Mail
an hour ago
- Globe and Mail
3 Dividend Stocks to Double Up on Right Now
Buy, sell, or hold? That's the question investors must continually ask about each stock in their portfolio. The correct answer might be to sell if your original investing thesis has changed. In many cases, the best course of action is to simply stay the course. Sometimes, though, adding more to your position makes sense. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Every now and then, the smartest strategy is to back up the truck and load up on more shares. Here are three dividend stocks to double up on right now. 1. AbbVie If there were a dividend hall of fame, I think AbbVie (NYSE: ABBV) should be in it. The major drugmaker is a Dividend King with 53 consecutive years of dividend increases. Since spinning off from Abbott in 2013, AbbVie has more than quadrupled its dividend payout. Its forward dividend yield currently tops 3.5%. Why double up on AbbVie now? Its dividend is one reason. However, an even more compelling motivation is that the company's growth should accelerate nicely over the next few years. AbbVie continues to be somewhat weighed down by the early 2023 loss of exclusivity for its then-top-selling drug, Humira. But the more time passes, Humira will have less of a drag on growth. Meanwhile, sales for the company's two successors to Humira -- Rinvoq and Skyrizi -- are soaring. AbbVie's pipeline also features several potentially solid growth drivers. The main argument against investing more heavily in AbbVie stock now is probably the Trump administration's threats of tariffs on pharmaceutical imports to the U.S. and the implementation of a most-favored-nation drug pricing plan. I suspect, though, that these won't derail AbbVie's growth much, if at all, over the near term and will likely be non-issues in the long term. 2. Enterprise Products Partners Want especially juicy income? Take a look at Enterprise Products Partners (NYSE: EPD). This master limited partnership (MLP) offers a forward distribution yield of 6.96%. Here's more good news: Enterprise has increased its distribution for 26 consecutive years. Yes, this sky-high distribution is a key factor behind my including Enterprise Products Partners on the list of dividend stocks to double up on right now. The stock won't have to deliver much in the way of appreciation to generate a double-digit percentage total return. I expect this midstream energy stock will provide nice growth, though. The U.S. is experiencing an explosion in the number of data centers, largely due to the breakneck adoption of artificial intelligence (AI). Many of these data centers will be powered by natural gas. That's great news for Enterprise Products Partners. Domestic demand isn't the only growth driver for Enterprise Products Partners, either. As co-CEO Jim Teague said in the MLP's first-quarter earnings call, "The bottom line is the world needs U.S. oil, natural gas, and natural gas liquids to provide for their people and to grow their economies." He's right -- and much of those hydrocarbons will flow through Enterprise's pipelines. 3. Realty Income Realty Income (NYSE: O) is listed third among the dividend stocks to double up on now, but it's only because I've listed the stocks alphabetically. There's a lot to like about this real estate investment trust (REIT). For starters, Realty Income's forward dividend yield is 5.66%. The company distributes its dividend monthly. It has also increased its dividend for 30 consecutive years, with a total of 131 dividend hikes during that period. If that's not enough to impress you, consider that Realty Income has generated a positive total operational return every year since its initial public offering in 1994. The stock's average total return since then is roughly 11%. Realty Income's growth prospects look good, too. The REIT targets a total addressable market of $14 trillion. Around $8.5 trillion of that market is in Europe, where the company has only two major rivals. Should you invest $1,000 in AbbVie right now? Before you buy stock in AbbVie, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AbbVie wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor 's total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 23, 2025
CBC
2 hours ago
- CBC
Senate Republicans advance Trump's 'Big Beautiful Bill' after dramatic late-night vote
Social Sharing Senate Republicans voting in a dramatic late Saturday session narrowly cleared a key procedural step as they race to advance U.S. President Donald Trump's package of tax breaks, spending cuts and bolstered deportation funds by his Fourth of July deadline. The tally, 51-49, came after a tumultuous night with Vice-President JD Vance at the Capitol to break a potential tie. Tense scenes played out in the chamber as voting came to a standstill, dragging for more than three hours as holdout senators huddled for negotiations, and took private meetings off the floor. In the end, two Republicans opposed the motion to proceed, joining all Democrats. There's still a long weekend of work to come. Republicans are using their majorities in Congress to push aside Democratic opposition, but they have run into a series of political and policy setbacks. Not all GOP lawmakers are on board with proposals to reduce spending on Medicaid, food stamps and other programs as a way to help cover the cost of extending some $3.8 trillion in Trump tax breaks. "It's time to get this legislation across the finish line," said Senate Majority Leader John Thune. Ahead of roll call, the White House released a statement of administrative policy saying it "strongly supports passage" of the bill. Trump himself was at his golf course in Virginia on Saturday with GOP senators posting about the visit on social media. But by nightfall, Trump was lashing out against holdouts, threatening to campaign against one Republican, Sen. Thom Tillis of North Carolina, who had announced he could not support the bill because of grave Medicaid cuts that he worried would leave many without health care in his state. Tillis and Sen. Rand Paul of Kentucky voted against. Pressure was mounting from all sides — billionaire Elon Musk criticized the package as "utterly insane and destructive." WATCH | Bill broke up Trump-Musk bromance: Trump, Musk and the big, beautiful bromance breakup 19 days ago Duration 5:04 The 940-page One Big Beautiful Bill Act was released shortly before midnight Friday, and senators are expected to grind through all-night debate and amendments in the days ahead. If the Senate is able to pass it, the bill would go back to the House for a final round of votes before it could reach the White House. With the narrow Republican majorities in the House and Senate, leaders need almost every lawmaker on board. A new analysis from the nonpartisan Congressional Budget Office said the Senate bill would increase by 11.8 million the number of people without health insurance in 2034. Senate Democratic leader Chuck Schumer of New York said Republicans unveiled the bill "in the dead of night" and are rushing to finish the bill before the public fully knows what's in it. He immediately forced a full reading of the text late Saturday in the Senate, which would take hours. WATCH | Federal minister says Canada pushing for tariff removal: Canada 'pushing' for tariff removal, Anand says after Trump halts trade talks | Power & Politics 1 day ago Duration 14:58 Make-or-break moment for GOP The weekend session could be a make-or-break moment for Trump's party, which has invested much of its political capital on his signature domestic policy plan. Trump is pushing Congress to wrap it up and has admonished the "grandstanders" among GOP holdouts to fall in line. The legislation is an ambitious but complicated series of GOP priorities. At its core, it would make permanent many of the tax breaks from Trump's first term that would otherwise expire by year's end if Congress fails to act, resulting in a potential tax increase on Americans. The bill would add new breaks, including no taxes on tips, and commit $350 billion to national security, including for Trump's mass deportation agenda. But the cutbacks to Medicaid, food stamps and green energy investments are also causing dissent within GOP ranks. The Republicans are relying on the reductions to offset the lost tax revenues but some lawmakers say the cuts go too far, particularly for people receiving health care through Medicaid. Meanwhile, conservatives, worried about the nation's debt, are pushing for steeper cuts. Canada's digital services tax under fire Dubbed the "revenge tax," Section 899 of Trump's One Big Beautiful Bill Act calls for a new withholding tax to be imposed on investment income paid out by American companies to investors who live in countries the U.S. government considers to have unfair or discriminatory taxes. Canada's digital services tax (DST), which hits companies like Amazon, Google, Meta, Uber and Airbnb with a tax on revenue from Canadian users, is among the taxes the U.S. considers discriminatory. In the last few weeks and months, Trump has given a number of rationales for escalating the trade dispute between Canada and the United States. On Friday, he zeroed in on the DST. The DST affects mega companies that offer digital services — like online advertising or shopping — and earn more than $20 million in revenue from Canadian sources. Giant companies like Amazon, Apple, Airbnb, Google, Meta and Uber will be taxed three per cent on the money they make from Canadian users and customers. WATCH | The potential big, beautiful impact on Canadian wallets: What Trump's 'Big Beautiful Bill' means for Canadians' wallets 28 days ago Duration 4:49 U.S. President Donald Trump indicated that he would increase government spending and loosen some fiscal restraints with a new spending bill dubbed the "big beautiful bill" last week. Mark Ting, a partner with Foundation Wealth and On The Coast's personal finance columnist, says that markets have already responded positively to the bill. The levy has been in place since last year, but the first payments are due starting Monday. It's retroactive to 2022, so companies will end up with a $2-billion US bill due by the end of July. Revenue is one big benefit. The Parliamentary Budget Office estimated last year that the tax would bring in more than $7 billion over five years.
