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Enterprise Products Partners L.P. Message Board

  • steveschrift steveschrift Aug 3, 2013 1:11 PM Flag

    WPZ,PAA,EPB,OKS,KMP,and now PAA all getting whacked or have been taken down already because

    they yielded under 4.5% with so many other vehicles out there yielding better investors looking for that yield dumped thier shares and found better options. Either the yield must go up from enourmous distribution increases or the price must come down to increase the yield. EPD is expensive clearly and outright. Dangerous levels now.

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    • The distribution is very safe. I like that but will buy more below $59.00 if we ever see it again.

    • Huh? Their yield were low because they were and/or are increasing distributions rapidly. Also suggest you take a look at the unit prices of all of the MLPs you mentioned. All are up significantly since late December. You comment on EPD has no basis. The distribution keeps increasing and if the offer a special as is likely next year they will be paying .73 or $2.92, That is enough of an increase to offset a 1% increase to about 3.7% in the 10 year T Bill rate.

      Also remember they are retaining about .35 a quarter or $1.40 a year. If they decided to pay out 90% they could raise the distribution to $4 a year.

    • You have a reasonable point.
      I put ^tnx (10 year treasury yield) against WPZ,PAA,EPB,OKS,KMP,PAA on a 1-year graph. By eye, some time in May the correlation seems to have gone from positive to negative looking at when short term peaks and valleys occur.

      I did not do any real analysis. It does seem logical that if intermediate to long yields go up, or are expected to go up, people will not pay as highly for EPD etc units. On the other hand, I think some of the pricing has taken into account that rates would go up. It seems overdue to me.

      What I don't know is how much EPD charges market rates vs regulated rates. If the expenses of the rails and trucks go up due to increased borrowing (or equivalent) costs, market rates would go up I would think.

    • another basher with a crystal ball, or maybe is the same basher with another name, cant tell anymore between they all act brain dead.

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