We reaffirmed our Neutral recommendation on leading master
Enterprise Products Partners, L.P.
), on Nov 21, 2013. The partnership reported weak numbers for the
third quarter due to higher quantum of expenses and weak
performance by the Petrochemical & Refined Products Services
ENTERPRISE PROD (EPD): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
SM ENERGY CO (SM): Free Stock Analysis Report
VOC ENERGY TRST (VOC): Free Stock Analysis
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Enterprise Products Partners is engaged in providing a wide range
of midstream energy services to the producers and consumers of
natural gas, natural gas liquids (NGL) and crude oil. The
partnership's assets include 50,000 miles of onshore and offshore
pipelines, approximately 200 million barrels of storage capacity
for NGLs, refined products and crude oil, and 14 billion cubic
feet of natural gas storage capacity.
We continue to view Enterprise Products Partners as a core
holding in a master limited partnership (MLP) portfolio, given
its string of organic growth projects, potential acquisitions,
strong balance sheet and solid liquidity position. The
partnership is one of the largest fully integrated midstream
service providers with a positive long-term outlook given its
significant geographic and business diversity.
Enterprise Products Partners increased its third quarter cash
distribution rate by 6% to $0.69 per common unit, or $2.76 per
unit on an annualized basis, thus marking the partnership's 37th
consecutive quarterly increase. With its diverse set of NGL,
natural gas, crude oil and refined products midstream
infrastructure assets, the partnership possesses fundamental
strengths that will continue to support distribution growth.
Enterprise Products Partners has made capital investments of
around $1.2 billion in the third quarter of 2013 and further
expects to bring online $7.5 billion worth of major assets from
2013 through 2015, including $1.5 billion in the remaining part
of 2013. The key projects consist of two NGL fractionators at
Mont Belvieu; Texas Express NGL pipeline (TEP); Front Range NGL
pipeline; extension of the Seaway crude oil pipeline; and the
completion of Eagle Ford crude oil pipeline. The successful
execution of these projects will be value accretive to future
However, Enterprise remains vulnerable to macro conditions and
unstable oil and gas prices, which in turn could hurt margins in
NGL, natural gas and other businesses.
Zacks Rank & Other Picks
Currently, Enterprise Products Partners retains a Zacks Rank #3
However, some better-ranked oil and gas stocks include
VOC Energy Trust
SM Energy Company
Matador Resources Company
). All these stocks carry a Zacks Rank #1 (Strong Buy).