We are maintaining our Neutral recommendation for Enterprise
Products Partners following its third-quarter 2014 earnings
results. Going forward, this MLP's large scale and diverse asset
base, robust coverage ratio of 1.4x and multi-billion dollar
projects under construction support meaningful distribution growth.
Moreover, Enterprise Products Partners recently hiked its cash
distribution by 5.8% and deployed cash in various fee-based
development projects. However, the partnership s earnings and
revenues missed Zacks Consensus Estimates. We remain apprehensive
about the lower pricing environment for natural gas liquids (NGL).
Enterprise Products Partners also remains vulnerable to macro
conditions and unstable oil & gas prices, which could hurt its
margins in NGL, natural gas and other businesses.
Enterprise Products Partners, L.P. (EPD), a leading master
limited partnership (MLP), 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
asset portfolio prior to its September-2004 merger with GulfTerra
included integrated natural gas and NGL transportation,
fractionation, processing, storage, and import/export facilities in
the U.S. The merger added to the mix a diversified portfolio of
onshore and offshore energy infrastructure assets. GulfTerra's
considerable offshore assets in the Gulf of Mexico (GoM) included
oil and natural gas pipelines, production platforms, and other
infrastructure assets. GulfTerra's onshore natural gas pipelines
and processing assets are located in Alabama, Colorado, Louisiana,
Mississippi, New Mexico, and Texas. The partnership's NGL
fractionation, pipelines, and storage facilities are located in
Texas, Louisiana and Mississippi.
The partnership's assets include 51,000 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. Enterprise divides its
operations into five segments: Natural Gas Liquids (NGL) Pipelines
& Services (accounted for 57% of its gross operating margin),
Onshore Natural Gas Pipelines & Services (14%), Petrochemical
& Refined Product Services (14%), Offshore Pipelines &
Services (2%) and Onshore Crude Oil Pipelines & Services
In Jun 2009, Enterprise Products Partners and Enterprise GP
Holdings L.P. merged with Teppco Partners along with Teppco's
general partner. The merger has made Enterprise the largest
publicly traded energy partnership.
Enterprise Products Partners L.P. (EPD): Read the
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