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Enterprise Products Partners L.P. Message Board

  • turnkeyoil Mar 4, 2012 8:34 PM Flag


    Let’s look at a little less traditional energy sources, natural gas liquids. We haven’t posted much about NGL producers, but we want to bring in something a little more interesting. In this case, Enterprise Product Partners are showing who’s boss in the NGL industry. David White gives some details on EPD’s profits.

    EPD has $3.9B gross operating margin for the year ended Dec. 31, 2011. Approximately 70% of this was fee based. NGL pipelines and services accounted for 56% of the $3.9B. Onshore natural gas pipelines and services accounted for 18%. Petrochemical and refined products services accounted for 14%. These included: refined products and petrochemical pipelines, butane isomerization facilities, octane enhancement and high purity isobutylene facilities, and marine terminals and transportation.. Onshore crude oil pipelines and services accounted for 6%. Offshore pipelines and services accounted for 6%.

    If you add to this EPD’s steady operating margin increases (from $1.8B in 2006 to $3.9B in 2011) and EPD’s steady increases in declared dividends (from $1.83 in 2006 to $2.44 in 2011) you get the picture of a very healthy company. EPD has an excellent dividend of 4.7%, but that pales in comparison to its next five year EPS growth estimate per annum of 30.20%. EPD has a 3-year total return CAGR of 39.9%, a 5-year CAGR of 17.5% (with a recession thrown in), and a 10-year CAGR of 14.4% (with two recessions in the mix).

    Interested in NGL? Well, if you want to get in on this industry, EPD may be a good choice. Good profits are a good sign, but be sure to dig deeper. Profits aren’t everything.

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