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Enterprise Hikes Cash Distribution - Analyst Blog

EnterpriseProducts Partners L.P. ( EPD ) declared an increase in the quarterly cash distribution paid to partners to 70 cents per common unit, or $2.80 per unit on an annualized basis. The quarterly distribution will be paid on Feb 7, 2014, to unitholders of record as of the close of business on Jan 31. This distribution, which represents a 6.1% increase over the 66 cents per unit distribution declared with respect to the fourth quarter of 2012, is the 47th distribution increase since Enterprise's initial public offering in 1998 and the 38th consecutive quarterly hike.

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 the master limited partnership 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 thanks to its significant geographic and business diversity.

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 made capital investments of around $1.2 billion in the third quarter of 2013 and expects to bring online $7.5 billion worth of major assets through 2015, including assets valued at $1.5 billion in the final quarter of 2013. The key projects consist of two NGL fractionators at Mont Belvieu; Texas Express NGL pipeline; 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 cash flows.

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.

Enterprise carries a Zacks Rank #3 (Hold). Better-ranked energy players include World Fuel Services Corp.( INT ),Cheniere Energy Partners LP.( CQP ) and Seadrill Partners LLC( SDLP ) . All these stocks currently sport a Zacks Rank #1 (Strong Buy) and offer value.

CHENIERE ENERGY (CQP): Get Free Report

ENTERPRISE PROD (EPD): Free Stock Analysis Report

WORLD FUEL SVCS (INT): Free Stock Analysis Report

SEADRILL PTNRS (SDLP): Free Stock Analysis Report

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


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

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