Enterprise Products Partners (NYSE: EPD) is a high-yield midstream master limited partnership (MLP). It is one of the largest midstream players in North America and has been a conservatively run and reliable income investment for decades. But the MLP’s unit price is marching steadily back toward the all-time high reached in 2014. Is it worth buying at such a lofty level? Yes, and here’s why.
As noted, Enterprise is one of the largest midstream businesses in North America. The midstream segment of the energy sector basically connects the upstream to the downstream and the rest of the world. The upstream is where energy is produced. The downstream is where it is processed into chemicals and refined products. The midstream is, effectively, the pipeline between the two and the business is built on a toll-taker model.
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