fact of the matter is that EPD has more than enough DCF to bump the rate of distribution increase.
I am happy with the recent .0025 larger increase per Q along with the 1X .005 they gave us in Q3 which was way over due
But that doesn't change the fact that EPD will post approximately $1 Billion in retained DCF for 2012
That .0025 increase per Q distributed all of $2 million extra per Q to unit holders... which means that over the course of a year, $20 million more is distributed.... remember thats out of $1 Billion retained..... a whoppin 2 %.... which leaves the big boys 98% of that cash to reinvest in operations
Of interest are Arbs comments on the ETP bd relative to distributions...
"Richard - You obviously need to go to the National Associartion of Puiblically Traded Partenerships Organization web site and read MLP101 primer. Since MLPs pay out all of their free cash flow and pay no (or few) taxes, the usual metrics of P/E ratios and all of the other accounting metrics have little or no meaning"
EPD comes no where near paying out "all of their free cash flow"... and I have never said that they should.... I just believe that they should be paying more to the unit holders.... another .00125 bump would propel EPD higher (thats $1mil a Q and another $10 mil a year but just another 1% of the retained cash)
Which would result in less units issued the next time they do a secondary.... which obviously results in lower total distribution costs over time....
I'm in the camp that says long time unit holders should be rewarded with the perk of greater distributions... increased equity... and fewer units outstanding over the long haul
EPD unit value is constrained by its yield... the only way to see increased unit appreciation at this time is by an increase in the rate of distribution growth