I've been surprised at the sleepwalk of ETE since its IPO. I had expected it to behave more like EPE.
It seems to me that with another increase in ETP's distributions likely, that EPE is in a good position to announce a substantial distribution of its own, no?
Now that we've had a chance to watch the EPE paint dry since the IPO, I was wondering if any of you thoughtful posters out there had a point of view on ETE?
Thanks in advance,
"But to be fair [to compare apples to apples],"
Good data: Might I add?
A number of investors do not grasp this concept yet. Hope this sinks in to those.
MLP's do not pay a yield %. They pay $$ per unit based on distributable cash flow. DCF.
The yield is determined by us the investors. We vote it up or down based on opinion and mood. If a MLP pays $1.00 in distributions and we the buyers are willing to pay $10 per unit, then that is 10% yield. If we decide to pay $20 per unit, then the yield is 5%.
In my view, voters do not do a good job of evaluationg their buys. Right now investors are setting the pace at around 7% for good growing MLP's and 7.5% for dead wood. The same investors might be fine with 2% yield Intel that is dead in the water in share price growth. OK it is negative growth.
Hopefully MLP people are a little the more logical here.
If my logic is in error, someone will correct me.
I should have stated that the metrics expressed in my previous posting were based on the Q1 distribution of 55 cents, and not the upcoming Q2 amount of 58.75 cents.
But to be fair [to compare apples to apples], the other MLPs have yet to announce their Q2 distribution increases. But still, ETPs increase should be well above sector average, and that would somewhat lessen the extint of the market yield premium.
And the average analyst price target has not changed since the March announcement of the distribution increase. It takes a few weeks for those changes to filter in to Yahoo. So the calculation of the price target 'premium' may be changing too.
Sorry for that omission.
locogoing wrote: "CS [Credit Suisse] is probably going to pump this thing to 60."
ETP already sells at a price that puts its yield at a 90 basis point premium to the "pipeline" sector average. The current average of price targets is $40. That places the current price at 96% of target in a sector ["midstream"] that averages 88% of target.
Anyone suggesting a $60 price for ETP should include a justification for such an out-of-consensus estimate.
I believe that ETP, due to its recent history of distribution increases far faster than sector averages, deserves to sell at a market premium. But ETP is fully priced [or close to it] now. And we would need to wait until the Q2 CC before there is news to justify ETP's price climbing further.
"you assume all growth just stopped. DONE, OVER."
My specific point here is EXACTLY that growth does continue despite higher interest rates. Quite different than how the price of a utility like FPL is theoretically affected. Future ETP growth YOY may be another matter but it's tough to beat these returns.
" top in spite of friday's topping in the long bond. Impressive!"
Many if not most do not get it: = MLP's
You see Yield shown as 5.9%.
People compare this to the long bond, etc.
If you believe the 5.9% number, you just do not get it. You is not you personally of course.
Over the last 8 quarters, ETP has grown their dist. at a 25% anualized rate. So if you take the last dist. and multiply by 4 and divide by the price per unit to get yield, you assume all growth just stopped. DONE, OVER.
And so the crowd says dynamic yield or forward yield is guessing, well, looking back and saying all growth just stopped, they are guessing with NO DATA.
Oh well, makes better buys for logical people.
I own ETP and I am up 13% in 6 months. How those 4.5% no growth bonds doing?
It would appear that a 10 cent increase in ETP distribution is about 7 cents at ETE? So 15 cents should be a 10 cent increase at ETE from 70 cents to 80? Big increase not completely factored in possibly to unit valuation.
Very much enjoy the posts on this site especially Factoid and Chartney!