Enterprise Products Partners: $2.8B Down, $5B To Go

Wunderlich Securities has published a research report on Enterprise Products Partners

and has initiated coverage on the company with a Buy rating. In the report, Wunderlich writes "Between 2009 and 2010, Enterprise will have completed $2.8 billion in growth projects. In addition, the partnership has approximately $5 billion worth of projects left to complete. These asset builds should enable Enterprise to experience continued cash flow growth, which, in turn, should flow down to investors through increased distributions. In our opinion, Enterprise's organic growth prospects alone make it a compelling investment consideration for investors. Enterprise increased its distributions by 6.6% and 5.8% in 2008 and 2009, respectively. Based on our distribution estimates of $2.315/unit for 2010 and $2.435/unit for 2011, growth would be 5.5% and 5.2% for 2010 and 2011, respectively. Based on our distributable cash flow estimates of $2.88/unit and $2.67/unit, this equates to coverage ratios of 1.3x for 2010 and 1.2x for 2011, respectively." Wunderlich has also issued a $48 price target on Enterprise Products Partners, which closed yesterday at $41.30.