Enterprise Products Raises Cash Distribution - Analyst Blog

Enterprise Products Partners L.P. EPD announced that the board of directors of its general partner has declared a quarterly cash distribution of 81 cents per common unit or $2.84 per unit on an annualized basis.

The cash distribution is 6% higher than the 77 cents per unit distribution declared in the first quarter of 2013. The raise in quarterly distribution represents the 48th distribution increase since the partnership's initial public offering in 1998 and 39th consecutive quarterly increase. The cash distribution will be paid on May 7, 2014, to unitholders of record as of the close of business on April 30.

Enterprise is engaged in providing a wide range of midstream energy services to the producers and consumers of natural gas, natural gas liquids NGL, and crude oil. The partnership is considered as a core holding in a master limited partnership 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.

Over the last one year and more, the partnership has commissioned several projects worth over $4 billion.  These projects include – the eighth NGL fractionator at Mont Belvieu, Texas Express NGL pipeline, the first two processing trains at its Yoakum natural gas plant, the extension of the Acadian Haynesville and the Seaway crude oil pipeline reversal. The Eagle Ford natural gas, NGL and crude oil pipelines are expected to deliver increased volumes over the coming years. These projects are likely to boost cash flow in the coming years. The partnership believes that the projects will generate new sources of fee-based cash flow that are expected to increase the proportion of its stable fee based income and thereby insulate it from any near-term shock.

Enterprise carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry include Range Resources Corporation RRC, Unit Corporation UNT and Helmerich & Payne, Inc. HP, all with a Zacks Rank #1 (Strong Buy).