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Capital Projects Should Fuel Enterprise Products’ Earnings Growth

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EPD’s capital projects

Enterprise Products Partners (EPD) spent $1.2 billion on capital projects in the first quarter. It expects to invest $3.4 billion to $3.8 billion on growth projects in 2019. These projects should continue to fuel the company’s earnings growth in the coming years. Enterprise Products Partners placed its Shin Oak Pipeline into service in the first quarter. The pipeline contributed $8 million to EPD’s gross operating margin during its one month of operation during the quarter.

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“Through April 2019, we placed $1.9 billion of growth capital projects into service. We have another $5.0 billion of major growth assets under construction of which we expect to put $3.5 billion of these projects into service between now and the end of the year,” noted A.J. “Jim” Teague, chief executive officer of Enterprise Products Partners.

Stock performance

Enterprise Products Partners stock has risen ~16% year-to-date, outperforming Energy Transfer (ET) and Magellan Midstream Partners (MMP). In comparison, Kinder Morgan (KMI) has risen ~29% year-to-date. The above graph compares the performance of the four stocks in 2019. The Alerian MLP ETF (AMLP) has risen ~14% in 2019.

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