Let’s look at a little less traditional energy sources, natural gas liquids. We haven’t posted much about NGL producers, but we want to bring in something a little more interesting. In this case, Enterprise Product Partners are showing who’s boss in the NGL industry. David White gives some details on EPD’s profits.
EPD has $3.9B gross operating margin for the year ended Dec. 31, 2011. Approximately 70% of this was fee based. NGL pipelines and services accounted for 56% of the $3.9B. Onshore natural gas pipelines and services accounted for 18%. Petrochemical and refined products services accounted for 14%. These included: refined products and petrochemical pipelines, butane isomerization facilities, octane enhancement and high purity isobutylene facilities, and marine terminals and transportation.. Onshore crude oil pipelines and services accounted for 6%. Offshore pipelines and services accounted for 6%.
If you add to this EPD’s steady operating margin increases (from $1.8B in 2006 to $3.9B in 2011) and EPD’s steady increases in declared dividends (from $1.83 in 2006 to $2.44 in 2011) you get the picture of a very healthy company. EPD has an excellent dividend of 4.7%, but that pales in comparison to its next five year EPS growth estimate per annum of 30.20%. EPD has a 3-year total return CAGR of 39.9%, a 5-year CAGR of 17.5% (with a recession thrown in), and a 10-year CAGR of 14.4% (with two recessions in the mix).
Interested in NGL? Well, if you want to get in on this industry, EPD may be a good choice. Good profits are a good sign, but be sure to dig deeper. Profits aren’t everything.
Quotes taken from report by David White, Read the entire article here.
This is not an offer to buy or sell securities. Oil investment carries with it very high risks. The information contained within this site has not been nor will it be verified by Turn Key Oil and is subject to change at any time. We are not a United States Securities Dealer or Broker or United States Investment Adviser. Do your own due diligence and consult with a licensed professional before making any investment decisions. Please read our full disclaimer before making any decisions.
