ETE Increases Cash Distribution - Analyst Blog


Energy Transfer Equity, L.P. ( ETE ) announced that its board of directors has approved of a 2 cent increase on a pre-split basis (1 cent per common unit on a post-split basis) in its quarterly cash distribution rate. The new post split distribution rate of 34.625 cents per unit will be effective from the fourth quarter of 2013 and is scheduled to be paid on Feb 19, 2014, to unitholders of record as of Feb 7, 2014.

The current 3.9% increase in the quarterly distribution rate marked the fifth consecutive increase in the partnership's quarterly cash distribution.

The annualized cash distribution rate of the partnership comes to $1.385 per unit, taking into consideration the two-for-one split of its outstanding common units. Post split the total outstanding common units will approximate 560 million units.

Recently, the partnership has taken a number of initiatives for creating value for its unitholders. The board of directors of Energy Transfer Equity not only authorized a stock split but also approved a $1 billion buyback program for its common units, effective immediately.

We believe that the increase in natural gas and natural gas liquids usage in the U.S. will create more demand for pipeline and allied services. Energy Transfer Equity with its pipeline, natural gas processing plants and natural gas storage facilities stands to benefit from these favorable market dynamics.

Apart from Energy Transfer Equity, a few other pipeline operators have also increased their quarterly distribution rates. Plains All American Pipeline LP ( PAA ) increased its quarterly cash distribution to 61.50 cents per unit, reflecting an annual hike of 9.3%. ONEOK Partners L.P. ( OKS ) increased its quarterly cash distribution to 73 cents per unit, reflecting an annual hike of 0.7%.

Energy Transfer Equity currently has a Zacks Rank #3 (Hold). A well-placed pipeline operator is Enbridge Energy Management LLC ( EEQ ), with a Zacks Rank #2 (Buy).

ENBRIDGE ENERGY (EEQ): Free Stock Analysis Report

ENERGY TRAN EQT (ETE): Free Stock Analysis Report

ONEOK PARTNERS (OKS): Free Stock Analysis Report

PLAINS ALL AMER (PAA): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: EEQ , ETE , OKS , PAA

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