Stock of the Day

June 26, 2020

Enterprise Products Partners (EPD)

$33.41
-$0.18 (-0.5%)
Market Cap: $72.79B

About Enterprise Products Partners

Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. It operates in four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The NGL Pipelines & Services segment offers natural gas processing and related NGL marketing services. It operates natural gas processing facilities located in Colorado, Louisiana, Mississippi, New Mexico, Texas, and Wyoming; NGL pipelines; NGL fractionation facilities; NGL and related product storage facilities; and NGL marine terminals. The Crude Oil Pipelines & Services segment operates crude oil pipelines; and crude oil storage and marine terminals, which include a fleet of approximately 250 tractor-trailer tank trucks that are used to transport crude oil. It also engages in crude oil marketing activities. The Natural Gas Pipelines & Services segment operates natural gas pipeline systems to gather, treat, and transport natural gas. It leases underground salt dome natural gas storage facilities in Napoleonville, Louisiana; owns an underground salt dome storage cavern in Wharton County, Texas; and markets natural gas. The Petrochemical & Refined Products Services segment operates propylene fractionation facilities, including propylene fractionation units and propane dehydrogenation facilities, and related marketing activities; butane isomerization complex and related deisobutanizer operations; and octane enhancement, isobutane dehydrogenation, and high purity isobutylene production facilities. It also operates refined products pipelines and terminals; and ethylene export terminals; and provides refined products marketing and marine transportation services. Enterprise Products Partners L.P. was founded in 1968 and is headquartered in Houston, Texas.

Enterprise Products Partners Bull Case

Here are some ways that investors could benefit from investing in Enterprise Products Partners L.P.:

  • The current stock price is $33.52, which is near its 1-year high of $34.63, indicating strong market performance and potential for further appreciation.
  • Enterprise Products Partners L.P. recently increased its quarterly dividend to $0.535 per share, representing a 6.39% yield, which is attractive for income-focused investors.
  • The company reported earnings per share (EPS) of $0.74, exceeding analysts' expectations of $0.69, showcasing its ability to generate profits effectively.
  • Analysts have a consensus rating of "Moderate Buy" with an average price target of $34.70, suggesting that there is room for growth in the stock price.
  • With a return on equity of 20.48% and a net margin of 10.49%, the company demonstrates strong profitability and efficient use of shareholder equity.

Enterprise Products Partners Bear Case

Investors should be bearish about investing in Enterprise Products Partners L.P. for these reasons:

  • The company's revenue decreased by 2.9% compared to the same quarter last year, indicating potential challenges in maintaining growth.
  • Wolfe Research downgraded the stock from an "outperform" rating to a "peer perform" rating, which may signal a lack of confidence in its future performance relative to peers.
  • The debt-to-equity ratio is 1.05, suggesting that the company has a significant amount of debt compared to its equity, which could pose risks in a rising interest rate environment.
  • Despite the recent dividend increase, the payout ratio is 79.55%, indicating that a large portion of earnings is being distributed as dividends, which may limit reinvestment in growth opportunities.
  • Market volatility, as indicated by a beta of 1.09, suggests that the stock may be more sensitive to market fluctuations, which could lead to increased risk for investors.

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