EPD Hikes Distribution Rate - Analyst Blog

As part of its effort to enhance unitholder value, Enterprise Products Partners L.P. (EPD) declared an increase in the quarterly cash distribution paid to partners to 68 cents per common unit, or $2.72 per unit on an annualized basis. This distribution represents a 7.1% increase over the 63.5 cents per unit distribution declared with respect to the second quarter of 2012.

The increased quarterly distribution will be paid on Aug 7, 2013, to unitholders of record as of the close of business on Jul 31. This is the 45th distribution increase since Enterprise's initial public offering in 1998 and the 36th consecutive quarterly increase.

The partnership's diverse set of NGL, natural gas, crude oil and refined products midstream infrastructure assets make it fundamentally strong to reward unitholders better. It is this fundamental strength that will help EPD to continue supporting distribution growth.

Enterprise Products Partners, a leading master limited partnership (MLP), is engaged in a wide range of midstream energy services to producers and consumers of natural gas, NGL, and crude oil. With its diverse set of midstream infrastructure assets, we believe the partnership possesses fundamental strengths, which will in turn support distribution growth consistently.

We continue to view Enterprise Products Partners as a core holding in an MLP portfolio, given its string of organic growth projects, potential acquisitions, strong balance sheet and solid liquidity position. The partnership is one of the largest fully integrated midstream service providers with a positive long-term outlook given its significant geographic and business diversity.

The partnership is scheduled to announce second quarterly results on Aug 1. The Zacks Consensus Estimate for the quarter is pegged at earnings of 68 cents per share.

The partnership currently holds a Zacks Rank #3, which is equivalent to a short-term Hold rating. However there are other stocks in the oil and gas sect! or – Enbridge Energy Management LLC (EEQ), Delek Logistics Partners, LP (DKL), and Kinder Morgan Management LLC (KMR) – which hold a Zacks Rank #2 (Buy) and are expected to perform better than the broader market.