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Enterprise Products Partners L.P. Message Board

  • mktplyr517 mktplyr517 Sep 20, 2012 3:56 PM Flag

    Just so I understand this...

    Now that the distribution growth rate has been increased...

    Professional analysts feel the stock price will go higher...

    I wonder who around here might have been saying something similar...

    and the reality is that they are really just giving it the .0025 bump that I have wanted.... aside from the special .005 one time bump to round #s off

    the .005 also accelerates the distribution to where it would have been had they bumped the rate back in Q1

    and we even get the yield to move higher for the short term...

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    • You claim victory, but keep in mind they said more than "we are increasing the distribution growth rate." They gave a reason for this (better than expected performance from recent projects), and that reason alone would have been enough to make the unit price go higher even if they had not announced a higher distribution growth at this time.

      All some of us were saying is that they shouldn't raise the distribution just because they could afford it in the short term. That is not responsible. They need a reason to justify it - to make it so everybody understands that it's sustainable. Now they have their reason, and in my view that is the best news.

      • 1 Reply to strum_this
      • No one "claimed victory"

        The issue wasn't as to whether they can justify that a bump in the distribution growth rate is sustainable... the issue was how could they justify not increasing the growth rate.. its all in the #s.. and the time had long past

        There was no justificatioin for not increasing the rate by a paltry $2 mil/Q when more than $500,000,000.00 of DISTRIBUTAL cash was retained in the 1st half... defending that position was both assine and illogical (they retained over $5 billion over 4 years)

        The rate was contracting at an ever accelerating pace and I don't care how much is being reinvested that is not really the best model for a MLP

        I suggest that those of you who were so admantly against this bump donate your increased income to charity.... and BTW this suggestion is no more out of line than cheerleaders telling me to just shut up and sell... there seemed to be a comfort in telling me what to do with my money so I am returning the favor

        EPD finally has a reason to move higher

    • I don't understand your math. Here's mine. Current distribution=$.635 per quarter times 6.1%increase for Q3=$.67375 times 6.5% increase for Q4=$.71750 per quarter.

      Sentiment: Buy

      • 2 Replies to debgideon
      • It's not 6.1% from the current distribution, but the year-ago number. That gives you the YOY rate of increase, which is what most analysts keep track of.

        Sentiment: Hold

      • Don't know what you're talking about. The press release gave the proposed distribution amounts: .65 for Q3 and .66 for Q4. Why are you trying to estimate them yourself when we already know the amounts?

        As for the impact on unit price, I expect there to be little as this increase is already priced in. The company has telegraphed this increased for some time and the unit price has already risen much more than the Alerian index over the last 6 months. So this announcement is not news and probably already priced in.

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