Energy Transfer and Enterprise Products Partners

Energy Transfer and Enterprise Products Partners: Midstream Operators Deliver Outsized Yields

ET and EPD reported strong Q2 results with 6.65% and 5.98% dividend yields respectively, but ET's aggressive acquisition strategy makes it the higher-conviction play for growth-oriented income investors.

The Markets Desk

Gokhshtein Media

October 10, 2026

3 min read

DALLAS

Energy Transfer (ET) delivered a 78.4 percent year-over-year revenue increase to $34.3 billion in the second quarter, with earnings per share rising 84.4 percent to $0.59. The master limited partnership operates over 140,000 miles of pipelines across 44 states.

Enterprise Products Partners (EPD) reported record second-quarter revenue of $18.3 billion, up 60.7 percent year-over-year, with EPS climbing 27.3 percent to $0.84. Adjusted EBITDA reached a record $2.8 billion, a 17 percent increase from the prior year.

Both trade at roughly 13 times trailing earnings and 12 times forward earnings—a significant discount to peers given recent operational performance.

ET offers a 6.65 percent dividend yield and has raised its distribution for 19 consecutive quarters, including a 3 percent increase in Q2. Distributable cash flow grew 32 percent year-over-year to $2.59 billion with a 43 percent payout ratio, leaving substantial room for additional distribution growth.

EPD provides a 5.98 percent yield with 28 consecutive years of dividend increases. Its quarterly dividend rose 2.8 percent to $2.24 per share. Record second-quarter DCF of $2.3 billion—up 21 percent year-over-year—covers its dividend 1.9 times.

ET is acquiring Vaquero Midstream for $2.65 billion to expand its natural gas liquids network and capture rising demand from data centers and power plants. This deal positions ET to grow volumes faster than peers while maintaining dividend coverage.

EPD's record quarter reflected record volumes through its 50,000-mile pipeline network, liquid storage facilities, and marine export terminals.

ET's 78.4 percent revenue growth and 84.4 percent EPS growth significantly outpace EPD's results. ET is the higher-conviction trade for investors seeking meaningful distribution growth alongside outsized yield. EPD appeals to conservative income investors who prioritize the longer track record and stronger payout coverage.

Watch ET's Vaquero integration timeline and distributable cash flow coverage through 2025. A sustained payout ratio below 50 percent would justify a re-rating higher.

DALLAS

Both trade at roughly 13 times trailing earnings and 12 times forward earnings—a significant discount to peers given recent operational performance.

EPD's record quarter reflected record volumes through its 50,000-mile pipeline network, liquid storage facilities, and marine export terminals.

Watch ET's Vaquero integration timeline and distributable cash flow coverage through 2025. A sustained payout ratio below 50 percent would justify a re-rating higher.