Pipeline company and master limited partnership (MLP) Enterprise Products Partners (NYSE: EPD) is famous for its big (and sustainable) distribution yield, which has made it a popular choice among dividend investors. But even the biggest dividend payers can lose out to the market if their share prices don’t grow fast enough.
Has an investment in Enterprise paid off for its stockholders over the short or long terms? Or is its big payout helping to hide a history of underperformance? Here’s the real truth about how this energy industry heavyweight has performed in recent years.
Enterprise’s stock was handily beating the market in March, but took a huge 15% hit in early April, reflecting investors’ concerns about how the newly imposed tariffs might impact the company’s business. Even though it has since partially recovered, Enterprise shares still lagged the broader market.
On an absolute basis, investors who bought Enterprise shares a year ago have lost 0.7% of their initial investment, compared to the S&P 500‘s gain of 12.9% over the same period:
But remember, a big part of the Enterprise investment thesis is its big distribution, which currently yields 6.6%. Once you factor in reinvestment of those distribution payouts — known as the total return — Enterprise investors have made a little bit of money — 6.4% — this past year. However, that still pales in comparison to the S&P 500’s one-year total return of 14.1%.
Does the picture look any better over three years?
Over the last three years, Enterprise’s total return has mostly mirrored the market’s total return. Some months it was a little higher, and some months it was a little lower. In April, even just after that big drop occurred, it was actually outperforming the S&P 500. However, after the market’s strong performance in the second half of 2025, Enterprise’s returns are lagging.
The S&P 500’s total return over the last three years is 75.9%, about 13 percentage points ahead of Enterprise’s total return of 63%.
Would investors have been better off if they’d invested in Enterprise five years ago?
As we saw with the April drop, one single period of relative underperformance can dramatically affect whether a company wins or loses to the market over the longer term. In this case, though, the shoe is on the other foot.
