Enterprise Products Partners (NYSE: EPD) has a strong track record of increasing cash distributions to investors, with 25 consecutive years of annual payout growth. The company has been able to achieve this through securing and developing high-return, organic-expansion projects.
Currently, Enterprise Products Partners has several expansion projects in progress, including the Sea Port Oil Terminal (SPOT). The company recently obtained a deepwater port license for SPOT, which will allow it to move forward with the development of an offshore terminal capable of loading 2 million barrels of oil per day. While the project is expected to cost around $3 billion, the company’s co-CEO Jim Teague has indicated that the actual investment may be lower.
Enterprise Products Partners is not planning to fund the entire project on its own. It has a joint development agreement with Enbridge (NYSE: ENB) for a Gulf of Mexico oil export terminal, and Enbridge has the option to purchase an interest in SPOT. The company’s main focus at the moment is on commercializing the project, and it is in discussions with potential partners to secure contracts before moving forward.
Adding SPOT to its portfolio would further enhance Enterprise Products Partners’ already strong organic-growth backlog. The company currently has $6.9 billion of approved major projects under construction, with clear visibility to grow its cash flow through 2026. With a solid financial foundation and ample flexibility, the company is well-positioned to continue investing in growth projects and acquisitions.
Overall, Enterprise Products Partners has a history of consistent earnings growth and increasing distributions to investors. With a robust project backlog and strong financial profile, the company’s future payout growth looks promising. Securing SPOT could further enhance its long-term growth outlook, making it an appealing option for investors seeking steady income growth.