|Bid||14.51 x 800|
|Ask||0.00 x 4000|
|Day's Range||16.98 - 17.28|
|52 Week Range||12.80 - 19.34|
|PE Ratio (TTM)||18.29|
|Earnings Date||Aug 6, 2018 - Aug 10, 2018|
|Forward Dividend & Yield||1.22 (6.92%)|
|1y Target Est||20.17|
Energy Transfer Partners, L.P. today announced it has priced an underwritten public offering of 16,000,000 of its 7.625% Series D Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units at a price of $25.00 per unit, resulting in total proceeds of $400 million.
Moody's Investors Service ("Moody's") assigned a Ba2 rating to Energy Transfer Partners, L.P.'s (ETP) proposed Series D Fixed-to-Floating Cumulative Redeemable Perpetual Preferred Units. Its Baa3 senior unsecured rating, its Ba1 junior subordinated notes rating and its P-3 commercial paper rating are not affected by this action. The proposed preferred units are rated Ba2, two notches below ETP's Baa3 senior unsecured rating, reflecting their subordination to all of the company's existing senior unsecured notes, its unsecured revolving credit facility and its subordinated notes.
Energy Transfer Equity (ETE) was trading at a distribution yield of 6.9% as of July 11. The recent increase in Energy Transfer Equity’s stock price caused a slight decline in its distribution yield. However, Energy Transfer Equity’s current yield is still above the five-year historical average. Energy Transfer Equity has increased its distribution 25% over the past five years. Energy Transfer Equity kept its distribution flat at $0.3050 per unit during the first quarter after two consecutive quarters of distribution growth.
Energy Transfer Equity’s (ETE) 30-day implied volatility was 27.5% as of July 11, which is higher than the 15-day average of 25.3%. The increase in Energy Transfer Equity’s implied volatility could be attributed to the recent increase in crude oil’s volatility.
US crude oil fell 5.0% on July 11 to end at $70.4 per barrel. The sharp cut came following resumed crude oil supplies from Libya. The decline in crude oil could weigh on Energy Transfer Equity’s (ETE) stock performance. Energy Transfer Equity, the MLP GP of Energy Transfer Partners (ETP), usually has a strong correlation with crude oil. The one-year correlation coefficient between Energy Transfer Equity and crude oil was 0.49 as of July 11.
Of the four MLPs that we’re discussing in this series, Enterprise Products Partners (EPD) received the most “buy” recommendations from the analysts surveyed by Reuters. All of the analysts surveyed by Reuters rated Enterprise Products Partners as a “buy.” In comparison, 94% of the analysts covering MPLX (MPLX) rated it as a “buy.” Nearly 76% of the analysts covering Energy Transfer Partners (ETP) rated it as a “buy.”
Currently, Energy Transfer Partners’ (ETP) net debt-to-adjusted EBITDA stands at ~5.1x—the highest among the four MLPs that we’re discussing in this series. We’re also analyzing Enterprise Products Partners (EPD), MPLX (MPLX), and Plains All American Pipeline (PAA). MPLX’s ratio is the lowest at 3.5x. Enterprise Products Partners’ ratio stands at ~4.2x.
Enterprise Products Partners (EPD) spent $3.4 billion on capital projects in 2017. For 2018, the company expects to invest nearly $3.3 billion in growth capital projects. The projects should contribute to Enterprise Products Partners’ future earnings. In May, the company started construction on its ethylene export terminal. Read Enterprise Products Partners Is Up 6% This Year: What’s Ahead? to learn more.
MPLX’s (MPLX) DCF (distributable cash flow) grew 43% in 2017 over 2016—the highest growth among the four MLPs that we’re discussing in this series. The growth was driven by contributions from logistics and storage assets acquired from Marathon Petroleum (MPC). MPLX acquired assets from Marathon Petroleum in February. The acquired assets and growth projects should continue to drive the company’s future earnings growth.
Energy Transfer Partners (ETP) is trading at a high yield of ~11.8%. MPLX (MPLX) and Enterprise Products Partners (EPD) are trading at attractive yields of 7.3% and 6.2%, respectively. Plains All American Pipeline (PAA) is trading at a yield of ~5.1%. In comparison, the Alerian MLP Index’s yield stands at ~7.9%. Currently, MLPs offer an attractive spread over the US ten-year Treasury yield, which stood at 2.84% on July 5.
Enterprise Products Partners (EPD) is trading at a forward EV-to-EBITDA multiple of ~13x—lower than its five-year average multiple of 14.4x, which indicates possible undervaluation. Similarly, Energy Transfer Partners (ETP) is trading at a forward EV-to-EBITDA multiple that’s lower compared to its five-year average.
The Kayne Anderson MLP Investment Company (KYN), Tortoise Energy Infrastructure (TYG), and ClearBridge Energy MLP Fund (CEM) have all generated negative total returns YTD (year-to-date). They’re the top MLP closed-end funds by assets under management. The Tortoise MLP Fund (NTG) and the First Trust MLP and Energy Income Fund (FEI) have also generated negative total returns YTD.
The Tortoise MLP and Pipeline (TORTX), the Oppenheimer Steelpath MLP Select 40 Fund (MLPFX), and the Oppenheimer Steelpath MLP Income Fund (MLPDX) all generated negative total returns in the first half of 2018. They’re among the largest MLP funds by assets under management. The Center Coast Brookfield MLP Focus Fund (CCCAX) and the Oppenheimer Steelpath MLP Alpha Fund (MLPAX) also generated negative returns in the first half of 2018.
Moody's Investors Service ("Moody's") announced today that the implementation of the proposed amendments to certain transaction documents will not, in and of itself and at this time, result in a reduction or withdrawal of the current Ba2 rating of the mortgage covered bonds issued by National Bank of Greece S.A. (NBG, counterparty risk assessment B3(cr)) under its Mortgage Covered Bonds 2 programme. Moody's has determined that the implementation of the proposed amendments, in and of itself and at this time, will not result in the downgrade or withdrawal of the ratings currently assigned to the mortgage covered bonds issued by NBG under its Mortgage Covered Bonds 2 programme.
Energy Transfer Equity (ETE), the MLP GP of Energy Transfer Partners (ETP) and Sunoco LP (SUN), ranks seventh among midstream companies in terms of seven-year total returns. ETP is also among the top ten.
Among the analysts surveyed by Reuters, 76.0% rate Energy Transfer Partners (ETP) as a “buy” as of June 27, while 24% rate it as a “hold.” Energy Transfer Partners’ GP, Energy Transfer Equity has a “buy” rating from 78.0% of the analysts.
Energy Transfer Partners (ETP) was trading at a PDCF (price-to-distributable cash flow) ratio of 4.8x as of June 27—significantly below its peers including ONEOK (OKE) and Enterprise Products Partners (EPD).
ETE is currently trading close to the low range ($17) of analysts’ consensus target price. A total of 78.9% of analysts have rated Williams Companies (WMB) as a “buy” as of June 22, while the remaining 21.1% have rated it as a “hold.” Seaport Global last initiated coverage on WMB with a “buy” rating.
Currently, Energy Transfer Partners (ETP) offers an attractive distribution of 11.7%. Energy Transfer Partners’ distribution yield has come off from its 2018 highs. However, the partnership’s distribution yield is still higher than the past three-year and five-year average of 8.9% and 6.7%, respectively.
Morgan Stanley unloaded a major position in Energy Transfer Equity (ETE) during the first quarter. It sold 29.6 million shares of ETE valued at $421.1 million. Morgan Stanley was followed by BMO Capital Markets, which sold 5.5 million shares of the GP.
Energy Transfer Partners’ (ETP) 30-day average implied volatility was 24.3% as of June 28—slightly below the 15-day average of 24.4%. Enterprise Products Partners (EPD) and ONEOK (OKE) have implied volatilities of 17.6% and 20.0%, respectively. The Alerian MLP ETF (AMLP) has an implied volatility of 23.1%. Usually, Energy Transfer Partners has a higher implied volatility compared to AMLP due to the partnership’s relatively higher commodity price exposure compared to most AMLP constituents.
Energy Transfer Partners (ETP) continued to trade above its 50-day and 200-day moving averages. The partnership was trading 2.0% above its 50-day simple moving average and 5.0% above its 200-day simple moving average as of June 27, which indicates bullish sentiment in Energy Transfer Partners stock. ONEOK (OKE) and Targa Resources (TRGP) were trading 5.3% and 3.8% above their 50-day moving average.
U.S. federal energy regulators have told Energy Transfer Partners LP to finish restoring the land around parts of its Rover natural gas pipeline in Ohio and Michigan before allowing the company to put more segments in service. FERC said it authorized ETP to put Rover's Vector delivery meter station in Michigan, Defiance compressor station in Ohio and Market Segment between Ohio and Michigan into service on May 1 even though the company had not completed restoration of the grounds around those facilities.
Why Energy Transfer Partners Could Gain Upward Momentum Energy Transfer Partners’ recent performance Energy Transfer Partners (ETP) has been sluggish in recent trading sessions despite strong gains in crude oil prices.