2024-06-28 17:53:54 ET
Summary
- Enterprise Products Partners is a well-run midstream firm with considerable excess distribution coverage.
- Heavy investments into energy-intensive AI Data Centers indicate a catalyst for growing energy demand.
- Large-scale midstream companies with extensive pipeline footprints are uniquely positioned to fill incremental demand growth.
- EPD has out-performed midstream rivals in terms of distribution growth in the last three years.
- My fair value for EPD is between $31-34.
Enterprise Products Partners ( EPD ) offers investors not only strong distributable cash flow and healthy distribution coverage, but as one of the largest U.S. midstream companies with an extensive pipeline network also the opportunity to invest in the AI revolution. While the connection to the AI theme is not necessarily intuitive, midstream companies like Enterprise Products Partners set to benefit from growing energy demand posed by the AI-driven expansion of the domestic Data Center market. This AI catalyst creates long-term tailwinds for distributable cash flow growth and could result in EPD continuing to out-perform its rivals in terms of distribution growth! ...
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Enterprise Products Partners: An AI Data Center Energy Play Paying You 7%