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Enterprise Products Partners L.P. Message Board

  • no1matemary no1matemary Oct 3, 2012 1:22 PM Flag

    Question

    LINE has 7% vs. 4.7% distribution plus is cheaper $41.5 vs. $54.10. Seems like a good time to switch since projected growth next year is much greater. Please advise. I am retired and looking for greatest income plus security. I could sell 1000 EPD and have 1300 LINE at a higher % distribution plus they have always grown dist. like EPD. Please tear this apart for me. Afraid of huge inflation coming.

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    • if you buy LINE, be patient and wait for a pullback. it's currently trading at an all-time high. we saw the MLPs drop $5 in May. it can happen again.
      MWE is also an good option with a 5.77% yield. they've had frequent SPOs... i'd buy it then.

      if price targets mean anything to you.......
      LINE is currently trading at $1.80 below its ave 12 month price target
      EPD is currently trading at $3.33 below its ave 12 month price target.
      MWE is currently trading at $4.06 below it's ave 12 month price target.

    • How "cheap" a security is cannot be defined by pure price? I suspect LINE is trading at a premium due to a higher yield. If you just want income, look at PHK, 10% a year, paid monthly. Now like LINE, I don't see a lot of capital appreciation but it should be okay for another year or two.

      • 1 Reply to businessguru75
      • "How "cheap" a security is cannot be defined by pure price?"
        That's true. Ridiculous to say one is "cheaper" because the price is lower.

        "I suspect LINE is trading at a premium due to a higher yield."
        But this is just as silly as the earlier statement. Yield is a function of price (ie. payout divided by price) so to say that price is high due to the yield is nonsense.

        Line has a higher yield, but that is because it is an E&P which have higher risk than midstreams. Which is not to say that EPD has no commodity price risk, they do.

    • LINE is good but higher risk than EPD.
      In general higher yield equates to higher risk.
      Your objectives of "greatest income plus security" are mutually exclusive.

 
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