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Enterprise Products Partners L.P. Message Board

  • Mktplyr517 Mktplyr517 May 2, 2012 10:00 AM Flag

    another monster Q....But....

    I'll say it again... this will not move significantly to the upside until the they increase the rate of distribution increases..

    DCF 3Xs coverage with special items.... 1.4Xs without

    There is more than ample room to move to .01 increases.... a massive .0025 increase... which equates to just $2.2 million more being distributed per Q...

    They retained $1.1 billion over the paid distribution with special items... and over $200 million over without the items... is it too much to ask that 1% of the retained cash without the items go into the unit holders pockets and increase the yield so that upward appreciation can resume?

    This $2.2 million being paid would add at least $5/unit to unit price... which is $4.5 BILLION in equity...

    We know they will issue more units down the road... and my vote is for higher unit price and less dilution

    I want both unit appreciation and more money in my pocket

    That is the point of being here

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    • I just caught the position paper. Let me say I sold 4K out of IRA and retain 1K. EROC NGLS KMP and at least 10 other mlp's doing the same general markets went up more than the paultry less than 1 penny increase. I believe all those who feel that it is worth putting out 50K for a fraction of a penny increase each quarter then so be it. I for one believe that the rule is distribution increase determines the price of the stock
      for mlp's. My model is ETP 16 same distributions and see what appreciation there is in 4 years. Only EVEP has been exception to the rule.

    • Does EPD project Sales increases to underwrite increases in distributions ?
      Anyone have info the next one, two or three years ???? The business has to grow in toll prices or volume !!!!!

    • Over a 30% return in the last 15 months. Better than most of the peers to mention.

      Agree with ARB. Time to move on. EPD can afford more - they said so themselves this week. EPD has agreed to revisit the distribution rate of increases - again restated yesterday. The problem is that the MLPs that have given big distribution increases have not been rewarded with increases in their unit price, while those that had significant increases in DCF have. Little to no correlation with bigger increases (Agree flat or no increase not good). The last point made by ARB is keeping strong for what could be a significant downturn. The weak biggies (KMI/KMP) will be hurt while those with a strong balance sheet will be open for much easier credit. Remember paying out your free cash make you a constant user of debt/equity markets.

    • As long as they increase at least at the inflation rate and are thriving operationally, i don't have much complaint. We have less fear of a surprise pause in the increases which would cause speculation that they may "cut" in the future.
      I comprehend all of the above.... However there does come a point in time that the contraction in the growth rate of the distribution becomes a hindrance....

      After 8+ years I believe that point has long past... I have been a holder for over a decade and this issue only started to bother me in the last year

      I believe that it is important that mgmt understand that the natives are getting restless on this issue... I infer that even arb agrees that the time to increase the growth has arrived and he aint gonna be to happy if the growth rate isn't bumped up in the near future

      along with that I have great concerns on the negative affect that Fed action will have on EPD. There is still a very small window to stay ahead of the Fed but the counterbalance in that sash broke and that window is in the process of slamming shut (and you have to be over 50 to understand that simile)

      Arb has now asked me to table it 2Xs... yesterday... I stopped replying to Mr Drastic "tax free distributions" (guy earned two apt nicknames in 24 hrs) in two threads and he followed over to civil discussions to further attack with his know it all ignorance

      Arb is correct... it is long past the time to table the discussion... until next Q

      One final point... (not directed at you) for a board that jumps down peoples throats for making simple mistakes such as calling the distribution a dividend... I find it amusing that a "cheerleader" isn't called to task when they ignorantly call the distribution tax free.

      That creates an epidemic of ignorance.... when it should have been cured at the get go

    • A basic question ???? Is all of EPD's work a Toll operation ????
      Do they ever own the Hydrocarbon they move and/fractionate ???

    • A basic question ???? Is all of EPD's work a Toll operation ????
      Do they ever own the Hydrocarbon they move and/fractionate ???

    • artist_formerly_known_as_pooch artist_formerly_known_as_pooch May 4, 2012 7:23 AM Flag

      In Williams (WPZ, WMB) cc's when they were asked about increasing the rate of distribution increase, they replied that there was no reason to "stretch" the increases because in the past unit prices did not "reward" them for doing so. They've been rewarded more for coverage, consist growth, and credit ratings (my inference)

      As long as they increase at least at the inflation rate and are thriving operationally, i don't have much complaint. We have less fear of a surprise pause in the increases which would cause speculation that they may "cut" in the future.

      EPD is a "core" holding. If you want a speculative growth player there are NGLS, MWE, GEL, etc All good.

    • Mktply -

      Two comments.

      One it is time to move on. With the rude comments going back and forth it makes this more like the reason I post mostly on IVillage where I don't have every other post an insult.

      Two, the simple facts are that EPD could pay out more, EPD has said they would revisit it and gave a time schedule for doing so, and I fully expect that they will change the rate of their distribution on their review.

      Last, while I certainly have discussed the problems with interest rate increases and that there is a definate correlation of about .45 between MLP unit prices and the 10yr TBill rate; there are many other factors today that effect the pricing including the availability of alternative investments. EPD basically stated three years ago that they were not going to increase their distribution at a faster rate because other who did so were not rewarded for those increases when rates were declining or stable and they would hold constant until rates began to rise.

      I disagree with you unit theory in that EPD has removed the need for some 200M units and $2B in debt with their policy. That in today's market is probably a good bet. The problem with spending your money now is later on you have none to spend in my opinion. The problem for those who pay out all their $$ is that in a tightening credit market the weaker companies will pay ever higher $$ for their borrowings. EPD has guaranteed this will not happen to them.

      Moving on.


    • Your posts get one star or two, except the first one

      well I guess that argument would hold water if it were remotely true

    • Look... I certainly don't look for trouble with someone who engages in civil discussion..

      I'm looking out... specifically at future Fed action

      As one who has held MLPs thru Fed tightenings in the past...

      I cannot recall a tightening cycle where MLPs perform well... they invariably underperform the market as a whole

      It is imperative that EPDs distribution growth be at the highest level possible to lessen the affect that Fed action will have on the Unit price

      I would rather see a bump in the distribution now... and an issuance of units at highs.... as opposed to finding oneself in the position of needing capital at the start of a Fed tightening cycle

      IF you haven't owned MLPs in a tightening cycle... I'm tellin ya that you will see a quick loss of 7.5-10% of unit value... in an amazinly fast fashion

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