On Apr 16, 2014, the units of Energy Transfer Equity, L.P. (ETE) touched a 52-week high of $49.02. The unit price was finally closed at $48.36, up 0.2% from the previous day’s closing. We believe that the partnership’s disciplined capital investment program and payment of cash distribution at regular intervals have led to the surge in unit price.
Energy Transfer Equity has a significant presence in most of the mineral-rich regions across the U.S. We appreciate the partnership’s steady effort towards expansion of its asset base.
Energy Transfer Equity’s unit Energy Transfer Partners, L.P. (ETP) intends to invest $2,060–$2,285 million for growth ventures and allocate $295–$355 million for maintenance projects in 2014. The partnership planned to invest a significant part of its fund for midstream and natural gas liquids transportation and services ventures.
Energy Transfer Partners’ another unit Regency Energy Partners LP (RGP) recently merged with PVR Partners, L.P. (“PVR”). We believe proper integration of new assets with the existing facilities will enable the partnership to strengthen its operations.
In addition to expanding midstream portfolio, Energy Transfer Equity also follows several initiatives including unit repurchase program and payment of cash distribution to maximize unitholder wealth. In Dec 2013, Energy Transfer Equity launched a buyback program worth $1 billion of common units.
Through Feb 10, 2014, the partnership repurchased around 1.7 million common units under this program. In Feb 2014, Energy Transfer Equity paid increased cash distribution of around 34.63 cents per unit on a post-split basis.
Energy Transfer Equity maintains a stable cash position and is showing its efficiency to improve cash inflow through operating activities. As of Dec 31, 2013, the partnership’s cash balance increased around 58.6% to $0.59 billion from $0.37 billion at year-end 2012. In 2013, Energy Transfer Equity’s cash flow from operating activities was roughly $2.42 billion, up 124.1% from approximately $1.08 billion in the year-ago comparable period. A stable financial position enables the partnership to continue with its growth ventures besides repurchasing units and paying regular cash distribution.
Energy Transfer Equity currently has a Zacks Rank #3 (Hold). Another better-ranked stock in the oil and gas pipeline industry is Access Midstream Partners, L.P. (ACMP), carrying a Zacks Rank #2 (Buy).