Enterprise Products Partners L.P. ( EPD ) announced an
increase in the quarterly cash distribution to 67 cents per common
unit, or $2.68 per unit on an annualized basis. The quarterly
distribution will be paid on May 7, 2013, to unitholders of record
as of the close of business on Apr 30, 2013.ENBRIDGE INC (ENB): Free Stock Analysis ReportENTERPRISE PROD (EPD): Free Stock Analysis
ReportNUSTAR ENERGY (NS): Free Stock Analysis ReportPLAINS ALL AMER (PAA): Free Stock Analysis
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This distribution, which represents a 6.8% increase over the
$0.6275 per unit distribution declared for the first quarter of
2012, is the 44th hike since EPD's initial public offering in 1998
and the 35th consecutive quarterly increase.
EPD is a leading master limited partnership (MLP) 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.
We believe EPD remains a core holding in the master limited
partnership portfolio with a focus on projects that generate stable
cash flow and contribute to its integrated value chain. While EPD
increased its cash flow distribution by 6.5% in the fourth quarter,
it also deployed cash in various fee-based development projects
that will likely generate operating cash flow to support its future
Over the last one year, the partnership has commissioned several
projects worth around $3 billion. The projects completed during the
fourth quarter include the sixth NGL fractionator at Mont Belvieu
and the expansion of the natural gas and NGL pipeline systems
serving the Eagle Ford shale. The Eagle Ford natural gas, NGL and
crude oil pipelines are expected to increase volumes over the
coming years. Recently, the partnership commissioned the third
processing train at its Yoakum natural gas plant. These projects
are likely to boost cash flow in the coming years.
Seaway Crude Oil Pipeline Company LLC - a 50/50 joint venture
between the affiliates of EPD and Enbridge Inc. (
ENB ) - manages the
Seaway crude oil pipeline.
However, EPD remains vulnerable to macro conditions and unstable
oil and gas prices, which in turn could hurt margins in NGL,
natural gas and other businesses. Hence, the partnership, which
recently entered into a 50/50 joint venture with Plains All
American Pipeline, L.P. ( PAA ) for a crude oil
pipeline in South Texas, carries a Zacks Rank #3 (Hold).
NuStar Energy L.P. ( NS ) is another MLP in
the oil and gas production pipeline sector, which holds a Zacks
Rank #2 (Buy) and is expected to perform better.