Stocks to Buy: Enterprise Products Partners (EPD)
While the midstream energy master limited partnership (MLP) Enterprise Products Partners (EPD) has assets spanning the entire fossil fuel realm, it’s one of the best stocks to buy as an LPG play. EPD is currently the largest producer of propane in the country.
Currently, EPD has natural gas liquids fractionating capacity of around 670 million barrels per day at its Mont Belvieu, Texas, complex. While most of that propane/butane is consumed here at home, Enterprise does export a small — but growing part — of that as LPG. Its various terminals currently have the capacity to 250 million barrels per year.
However, the firm isn’t resting on its laurels. EPD has recently undergone some refrigeration capacity upgrades at its Houston Ship Channel LPG export facility. Those upgrades will increase its capacity to load propane by an additional 1.5 million barrels.
That expanded capacity will lead to higher margins as prices for propane and LPG rise due to exports. Already, EPD has an industry-high gross profit margin of 7% on its midstream operations. Those margins and strong cash flows have helped the MLP recently raise its dividend as well. Shares of EPD stock now yield nearly 4%, making it an easy choice for our list of the best energy stocks to buy.