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EPD - Enterprise Products Partners


samthefirefly
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"Enterprise Products Partners is a master limited partnership that transports and processes natural gas, natural gas liquids, crude oil, refined products and petrochemicals. It is one of the largest midstream companies, with operations servicing most producing regions in the Lower 48 states. Enterprise is particularly dominant in the NGL market and is one of the few MLPs that provide midstream services across the full hydrocarbon value chain."

 

- 10-Yr Median Returns: ROA 6.3%, ROE 16.4%, ROIC 7.6%

- Average cash flow/revenue over the past handful of years is in the high 20s

- Average net margin over the past five years is above 5%

- Low financial leverage

- Divided increased for the past 21 years (current yield is 8.57%)

- Quick ratio 0.61, current ratio 1.12, debt/equity 1.19, interest coverage 4.72

 

Oil segment is only 24% of EPD's business, and valuation is cheaper than its historical average (5-year)

 

- P/S 1.62 (current), 1.88 five-year average

- P/E 10.08 (current), 17.07 five-year average

- P/B 1.81 (current), 2.40 five-year average

 

There is some fascinating info about their economies of scale (and resulting economic moat), business strategy that secures large parts of their revenue in advance, and exemplary management team. Leaving some great links/research from people with more experience than me:

 

ValueStockGeek DD: https://valuestockgeek.com/2020/09/23/enterprise-product-partners-epd/

DividendData Video DD:

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