"We consider EPD units a core holding among MLP investors given its superior position
across many investment metrics: large inter-connected asset footprint, high visibility to
growth opportunities, balance sheet strength (only MLP rated BBB+/Baa1), high
distribution coverage, proven high quality management, strong corporate culture, and
sustainable distribution growth.
Given EPD’s superior coverage ratios and visible growth opportunities, we believe that
investors will likely bid down the yield on EPD’s units lower than what would be typical of
an MLP growing its distribution roughly 5-7%. We believe that EPD could trade in a yield
range of 4.25%-4.5% (~a 150-175 bp premium to the yield target on the AMZX) which
implies a 12-month target range of $63-$67 and $65 TP. Together with $2.78/unit in
expected distributions suggests a total return of 9%-15%, which is not quite enough to
support an Outperform rating over the next 12 months, but suffice to say is at the high end
That said, we continue to view EPD as a core holding for MLP investors and would take
positions with the view of holding those positions for the next 3-5 years, particularly, if we
see pull backs in the price of EPD units. Should we see a sizable pull back in the value of
the units, we would most likely become more positive on the stock."
CC wasn't that informative coming as it did so soon after the analysts meeting they had 4/17. That was extremely interesting and confirmed I'm likely to be to be holding my units for quite a few more years(8 so far), as EPD has many $billions more opportunities for organic growth. Analyst's day webcast and presentation still available on their site.