The Best Stock in Texas: Enterprise Product Partners

We scoured the nation to identify the best stock in every state. Enterprise Product Partners (symbol EPD) is the publicly traded company we picked in Texas. The company headquarters is located in Houston.

A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.

Enterprise Product Partners by the Numbers

• Headquarters: Houston
• Share price: $26.00
• Market value: $55.7 billion
• Price-earnings ratio: 18

(Prices and data are as of June 22, 2017)

Enterprise Product Partners is a master limited partnership that owns a network of pipelines and storage depots. It transports and stores natural gas, natural gas liquids, crude oil, refined energy products and petrochemicals. Value Line analyst James Flood calls it “arguably the best-run MLP in the industry.” Another fan, Morningstar’s John Buethe, says that “while many other midstream operators are playing checkers, Enterprise Products Partners is a chess master.” Particularly compelling, says Buethe, is the company’s industry-leading position in natural gas liquids, which should see a 40% boost in demand by 2018. Enterprise ended 2016 with enough available cash to cover 122% of its distribution. That augurs well for more boosts to its payout, which currently stands at $1.66 per unit, for an annual yield of 6.4%. Analysts at Credit Suisse see earnings rising by 15% this year and assign the stock a 12-month price target of $34, along with a “buy” rating.