El Paso Pipeline's Partnership Will Help Strengthen Growth, Says Wunderlich

Wunderlich Securities has published a research report on El Paso Pipeline Partners

and has initiated coverage on the company with a Buy rating. In the report, Wunderlich writes "Our view of El Paso is based upon: the partnership has strong estimated coverage ratios over the next several years, which demonstrates its ability to continue to increase its distribution; it has a strong, asset-rich parent; and we believe it is well-positioned to take advantage of the increasing importance of natural gas in the U.S. Combining all of these factors results in a partnership that we believe should be owned by investors seeking a high-quality investment. The partnership's distribution growth over the next several years should be best in class at an estimated 19% in 2010, 14% in 2011, and 9% in 2012. The estimated coverage ratios reinforce our outlook for distribution growth. The partnership's asset-rich parent should provide El Paso with further asset drop-downs that should enhance growth." Wunderlich has also issued a $40 price target on El Paso Pipeline Partners, which closed yesterday at $32.99.