Enterprise Products Partners is a provider of natural gas pipeline and processing services and natural gas liquids fractionation, storage, transportation and terminal services. EPD also is a major developer of midstream infrastructure in the deepwater Gulf of Mexico region.
In general, analysts expect rising pipeline volume to generate good things for EPD: increasing earnings and impressive cash flow.
Enterprise has a large portfolio of projects that hold substantial promise, with only modest risk. The likely star? The Independence Hub/Pipeline, on which production commenced in 2007.
Other positives: EPD's offshore pipeline infrastructure helps diversify its revenue base, and the company has the size and financial resources to expand without relying on acquisitions. A solid asset base and access to high-demand markets adds to the positive story, and a reasonable p/e of 13 is a deal-clincher. The First Call FY 2009/Fy 2010 EPS estimates for EPD are $1.70 to $1.80.
Stock Analysis: Enterprise Products Partners is a moderate-risk stock. Consider buying a 25% position in EPD now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your EPD position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $12.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Reader Comments (Page 1 of 1)
4-29-2009 @ 5:33PM
FOXYLYNX said...
I OWN EPD AND PURCHASED MORE TODAY WHILE IT WAS DOWN. I HAVE MADE MONEY ON THE RISING SHARE PRICE AND IT HAS A VERY NICE DIVIDEND OF .53 CENTS A SHARE.