Evaluating EPD Stock's Actual Performance

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.

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One year: A big flop

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?

Three years: Bigger gains, but not big enough

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?

Five years: Now we're talking

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.

The S&P 500 had a disastrous 2022, as post-lockdown inflation, supply chain issues, and other problems wreaked havoc on businesses. However, Enterprise fared much better than the overall market in 2022, which set it up for long-term success. Also, the power of reinvested dividends compounds over time, which helped propel Enterprise's five-year total returns to 127.4%, thumping the S&P 500's 99.5% total returns over the same period.

Interestingly, Enterprise's absolute returns -- which don't factor in the dividend payouts -- are less than half of its total returns over five years, at 57%. That lags the market's absolute returns of 86% by about 29 percentage points, showing the true power of buying and holding dividend-paying stocks over the long term.

John Bromels has no position in any of the stocks mentioned. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.