GICS Sector : Energy
Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products.The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services.The NGL Pipelines & Services segment offers natural gas processing and related NGL marketing services.
Enterprise Products Partners L.P. reported adjusted EBITDA of $2.4 billion and distributable cash flow of $1.8 billion, providing 1.5x coverage. Net income attributable to common unitholders was $1.3 billion or $0.61 per common unit, slightly missing analyst estimates of $0.651. Adjusted cash flow from operations was $2.1 billion, and the partnership declared a distribution of $0.545 per common unit, a 3.8% increase over the previous year.
Publication Date: Nov -01
The company's financial performance was robust, with revenues expected to grow at 0.5% next year, according to analyst estimates. The current P/E Ratio of 11.49 and EV/EBITDA of 10.23 indicate a reasonable valuation. The Dividend Yield of 7.02% is attractive, especially considering the company's commitment to returning cash to shareholders.
Several projects are expected to contribute to the company's results in the fourth quarter, including Frac 14, which has been commissioned after a 3-month delay, and the Bahia pipeline and Seminole pipeline conversion, which will add capacity to the NGL pipeline system and return capacity and flexibility to the crude oil pipelines. As Jim Teague mentioned, "Bahia will be online by the end of November, Frac 14 is up and running, and the Neches River Terminal will be fully ramped by the middle of next year."
The company sees organic growth CapEx in the $2 billion to $2.5 billion range over the next 2-3 years and expects to have some free cash flow to deploy, with a split between buybacks and debt paydown. The $3 billion increase to its buyback program takes it from $2 billion to $5 billion, with $3.6 billion in capacity remaining. Randy Fowler stated, "Our capital build-out phase is complete, and we're now focusing on cash return to shareholders."
With a consolidated leverage ratio of 3.3x, above the target range due to the inclusion of large projects in the debt balance without EBITDA, the company's balance sheet is still robust. The ROIC of 11.07% and ROE of 20.41% indicate a strong return on investment. As the company continues to execute on its projects and return cash to shareholders, the current valuation appears reasonable, with a P/S Ratio of 1.22 and a Free Cash Flow Yield of 6.32%.
3 Top Dividend Stocks to Buy in December
Dec -06
12 Years With Zero Gains: Can Your Retirement Plan Survive A 'Lost Decade?'
Dec -06
$50 Oil Price Scenario: Enterprise Products Partners Better Positioned Than Energy Transfer
Dec -06
3 Dividend Stocks to Double Up on Right Now
Dec -06
3 Top Dividend Stocks to Buy in December
Dec -05
Enterprise Products' Distribution Yield Is More than 6%: Is it Lucrative?
Dec -05
3 Stocks Giving You More Than 4 Percent Income in 2026
Dec -04
This Nearly 6.7%-Yielding Dividend Just Keeps Heading Higher
Dec -04
The crude oil pipelines segment is expected to grow due to increasing demand for crude oil transportation, driven by rising US shale production. Additionally, Enterprise Products Partners L.P.'s strategic expansions and investments in new pipeline projects will likely contribute to growth.
The NGL pipelines segment is expected to experience robust growth due to increasing demand for NGLs, driven by the growing use of NGLs as a feedstock for petrochemical production. The segment's extensive network and strategic expansions will likely drive growth.
The petrochemical and refined products segment is expected to grow due to increasing demand for petrochemicals and refined products, driven by a strong US economy and growing industrial production. The segment's diversified services and strategic investments will likely contribute to growth.
The natural gas pipelines segment is expected to experience moderate growth due to increasing demand for natural gas, driven by growing power generation demand and industrial consumption. The segment's extensive network and strategic investments in new pipeline projects will likely drive growth.
Enterprise Products Partners L.P. benefits from its diversified asset portfolio, strategic partnerships, and increasing demand for midstream services, driving growth in the energy infrastructure sector.
Enterprise Products Partners L.P. operates a network of natural gas pipelines that transport natural gas from production areas to consumption areas.
Enterprise Products Partners L.P. provides natural gas processing services to separate natural gas liquids (NGLs) from natural gas.
Enterprise Products Partners L.P. operates a network of NGL pipelines that transport NGLs from processing facilities to fractionation facilities.
Enterprise Products Partners L.P. provides fractionation services to separate NGLs into individual components such as ethane, propane, and butane.
Enterprise Products Partners L.P. operates a fleet of vessels that transport NGLs, crude oil, and other petroleum products.
Enterprise Products Partners L.P. provides petrochemical services, including storage, transportation, and marketing of petrochemical products.
Enterprise Products Partners L.P. operates a network of crude oil pipelines that transport crude oil from production areas to refineries.
The threat of substitutes for Enterprise Products Partners L.P. is medium due to the availability of alternative energy sources and transportation methods.
The bargaining power of customers is low due to the company's diverse customer base and lack of concentration.
The bargaining power of suppliers is medium due to the company's dependence on a few key suppliers for certain materials and services.
The threat of new entrants is low due to the high barriers to entry in the energy transportation and storage industry.
The intensity of rivalry is high due to the competitive nature of the energy transportation and storage industry, with many established players competing for market share.
| Value | |
|---|---|
| Debt Weight | 51.23% |
| Debt Cost | 4.40% |
| Equity Weight | 48.77% |
| Equity Cost | 8.90% |
| WACC | 6.59% |
| Leverage | 105.05% |
Value: 7.2
Growth: 6.8
Quality: 7.1
Yield: 10.0
Momentum: 6.5
Volatility: 7.7
1-Year Total Return ->
Value: 5.7
Growth: 5.0
Quality: 4.9
Yield: 10.0
Momentum: 6.0
Volatility: 10.0
1-Year Total Return ->
Value: 7.2
Growth: 3.6
Quality: 4.1
Yield: 10.0
Momentum: 6.0
Volatility: 9.3
1-Year Total Return ->
Value: 4.0
Growth: 3.6
Quality: 5.2
Yield: 9.0
Momentum: 7.0
Volatility: 9.3
1-Year Total Return ->
Value: 2.0
Growth: 4.6
Quality: 5.6
Yield: 8.0
Momentum: 8.0
Volatility: 9.0
1-Year Total Return ->
Value: 5.5
Growth: 5.2
Quality: 4.8
Yield: 10.0
Momentum: 2.0
Volatility: 8.3
1-Year Total Return ->