I've been considering buying stock in this company for a couple of years. However, I am scared off by the huge debt. If I'm reading the numbers right, they have about 143 million in cash generated each year. However, they are about a Billion dollars in debt!
At that rate, even if they took all of their earnings each year, and put them into paying off the debt, it would take about 9 or 10 years.
I prefer to invest in companies that only have about 3 years' worth of debt or less. In other words, if they applied all of their earnings to the debt, they could have it paid off in that amount of time.
Considering this long term debt hanging over the company, why would anyone invest here, instead of in a company with virtually no debt, but similar profitability numbers?
While your doing your due dilligence, take some time to research APL, BPL, BWP, CPNO, DPM, DEP, EEP, EPD, ETP, EROC, GEL ,GLP, HEP,HLND,KMP,MMLP,MMP,MWE,NRGY,OKS,PAA,PVR,RGNC,SXL,TCLP,TPP,TLP,VLI,WPZ,XTEX.
All have similar structures. Then look at the history of unit price and distribution history. Nuff said.