Enterprise Products Partners L.P. Message Board
-
I don't think this is 'attractive' until the yield hits 6%
$43... or 10% further downside
I've said it many times... sooner or later something will drive MLP yields to historical norms
and as ugly as that sounds a non-preformer like ETP will see 11-12% yields
IF memory serves me EPDs yield approached 11% in 09-
While you wait for ATTRACTIVE you best pack a Big Lunch. I don`t believe EPD will go as low as $43.00 it was undervalued at $46.00. It could happen though Stranger things have happened.As far as your memory serving you, I don`t remember EPDs Distribution being 11% and i`ve owned some for a long while.If it somehow manages to slip to $43.00 I may have to Rob a Bank to buy more as of Now I am Broke.
Sentiment: Strong Buy
- 1 Reply to bhenning32
-
Yes EPD'd distribution rate did reach 11% in October 2008. I know, because I couldn't believe it and bought heavily. The pattern has been that anytime EPD declines to a level where the yield reaches 5%, the price within a day or two dramatically adjusts upward.
EPD has the whole package. The yield is the icing on the cake. Your view of yield reminds me of someone who can't see the forest for the trees.The beauty of MLP's is not only the yield, but the growth in the unit price. EPD has compounded returns of 11% when you include both components.
I believe this will continue for a number of years given the extent of their lucrative projects about to come on line and the prospects for natural gas and its' derivatives in the near future.Sentiment: Buy
-
"sooner or later something will drive MLP yields to historical norms"
"IF memory serves me EPDs yield approached 11% in 09"
So you consider 2009 the historical norm?- 1 Reply to lizahuang54321
-
I consider 6% yields (6-7% actually) the historical norm....
I pointed out that ETP could easily approach 11-12% yields in this cycle... and that EPD actually traded to that yield area in 09
Its why distribution growth rate needs to be robust to maintain unit value
They change the tax structure of MLPs and we will see a new normal of 8-10% yields.... and for the cheerleaders.... that yield is only attained by a severe reduction in unit value
-