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Comments (165)

Each political party has failed America... Federal debt at record levels, GDP will be really low for years... Money give aways at unheard of highs...
When does this end...
Squabkiller profile picture
The 2nd president from now will be known as a modern-day Herbert Hoover.
Buy your wheelbarrow now, they are not easy to put together.
Seeking Alpha just censored my comment!
I was discussing the differences in economic policy as it relates to political ideology and political parties. But, apparently I/we are not allowed to discuss this topic on Seeking Alpha!
As everyone knows ....economic policy matters a great deal because of it's effect on economic activity, growth, the GDP, the stock market. and its effect on businesses.
And, we also know there are HUGE differences between socialst policies and policies of this administration!
The policies of this administration created a very vibrant and robust economy with record stock market highs with the lowest unemployment in the history of the country.....until the virus shutdown hit.
Economic policy is EVERYTHING!
But, on Seeking Alpha.....don't mention any Party or Paries ny name.....we certainly don't want to be "political" do we?

Retired1. PhD
Bulldog67 profile picture

Glad you were persistent and got it published. I enjoyed reading your comment, and it is dead on the money. This fall’s election will basically be about Socialism vs Capitalism. The latter is certainly more positive for energy stocks, and for stocks in general. Not to mention improving the standard of living for the average American!

Don't think you comment was removed for naming a political party. There are several reasons comments are removed (e.g., personal attack, vulgar expression, etc., etc.).
Iggy_de_la_Varga profile picture
stock market returns have historically been at least as high under democrats as republicans

Biden is clearly a corporatist based on his record, your post SHOULD be moderated for espousing partisan falsehoods

Retired1 tiresomely ignores Trump's tax-cut-and-spend profligacy swelled the deficit; oversaw record corporate cash hoards that are economically unproductive; imposed tariff's that are economically unproductive; exited the pacific trade hampering trade; which is economically unproductive; etc

partisan politics is a joke

if Biden's election causes partisan "investors" like retired1 to irrationally sell EPD out of fear, I'll add- just like I added green energy names when Trump got elected
I sold the $8 strike leap puts for $2.40.

Erosion of premium my way at this time as the share price rises. I have invested the premiums in other assets.

Its a bullish bet that ET was too cheap.

time will tell.

I had other places for the cash.

2% of account value position.

All the best...
and sold some more today for $2.70..

invested the premiums to reduce cost of ownership if put to me.
Thanks for the article. I've had both for a few years. EPD 200 shares initially @ ~$28 averaged down in March as I added another 100. Several buys of ET starting around $15 and added frequently last fall as it steadily came down. Falling knife scenario stopped me in favor of the EPD additions. I will drip my EPD but 750 shares is enough for ET. They are the largest 2 holdings of KYN with EPD having the most and about 50% more than ET.
very informative. i'm new on this subject. but sounds like people are predicting (hoping) ET to do the goods and not the bads, whereas EDP has and will continue to do the goods and to stay away from the bads.
iel76 profile picture
Our weekly "Energy Transfer is Wonderful" article... Never has a company that has underperformed so badly received so much love...

Robert Shriver Barnes profile picture
Like any investment, it all depends on what price you paid for it. My average price is $8.40 and I think there's allot of upside from there. For someone who bought at $17 not so much....
Bulldog67 profile picture

I know what you are saying, but a quick clarification. The upside is the same for both you and the investor who bought at $17. Only the ROI will be different.
Wait for the KW divide the cut it’s coming
Bulldog67 profile picture

Why do you think the distribution will be cut?
Do some research Energy Transfer Partners. Start in the late 1990s You will see 2 ETP mergers. With sister companies each time the dividend was reduced to match the sister company. Which was actually lower. Which cut ETPs dividend both times to the lower rate of the merger partner. Spend some time you can find it all
Bulldog67 profile picture

I am well aware of the history of ETP & ET, although I have only owned ET since well after the “roll up”.

So you don’t really have a reason for believing the distribution will be cut, other than you had it cut as an ETP owner?

One simple question: if KW were planning to cut the distribution, why is he continuing to buy more units himself? He is the largest single unit holder currently.

You seem to ignore that ET’s distribution coverage is currently over 1.7X, and that the company expects to be cash flow positive in 2021. But don’t let solid fundamentals confuse your made up mind! :-(
Pooh_Lover profile picture
Anyone who got EPD below $12 made the best investment of their lives. IMO
How about this? I bought a ton at 4.70. I am extremely pleased and it will provide me with tremendous retirement income for years to come, even in the unlikely event that the distribution is cut (which is possible certainly, but not likely).
Nice article
Considering that the growth stocks are so over valued with many forward quarters of lower earnings probable. these ET analysis numbers look great..."Energy Transfer has their results significantly more skewed in a positive direction, with an impressive 81% of the results producing positive returns versus a still decent 68% for Enterprise Products Partners.
Similar businesses, but EPD is selling at a significant premium compared to ET, so of course ET has a greater probability of a positive return
No comparison as to quality of management. EPD wins hands down. I own both
castle profile picture
I read the article twice and am dumbfounded as to how he decided the facts were for ET to be best investment
grbbiker profile picture
He expects ET to have a higher overall yield plus appreciation potential. I agree with that, but hold much more EPD than ET because KW is a wild card and the question is whether ET (or its board) will ever get religion about reigning in debt growth if not decreasing debt…..who knows?
I'm alwsys confused by the adjectives wild card and wildcatter just thrown out there about Mr. Warren. They almost seem perjorative. I've owned shares of ET for 6 years now and his moves have seemed prudent to me. Most companies take on debt to grow. And growth produces cash flow.
Bad luck in battling dark forces in the Dakotas and PA, but the decisions to build were sound.
jakefountain profile picture
@josephmulvey Problem is they are not growing. TTM revenue is down as was Q1 20 vs Q1 19. You realize ET total return is down almost -73% last 6 years, ouch!
I'm puzzled by the revenue these MLP pipeline companies produce. Do they get paid by the number of barrels flowing through the pipe, based on the crude oil current prices as a percent, or a flat rate? Therefore do their monthly payments fluctuate?
I'm not pretending to be an expert but i know a lot of them have contracts that include volume commitments but of course the more that they pump the more they are going to get paid.
Bulldog67 profile picture
@Jim Aldrich

Most of the contracts that MLP’s sign are based on volume thru the pipes. Thus they are not commodity sensitive (except if lower oil / gas prices reduce production and thus volume thru the pipes). Most contracts have “take or pay” written in, meaning there is a minimum amount of volume that has to be paid for even if not shipped.
Mostly, its contracted stable cash flows with the producers. sometimes, they buy oil from a producer. But, producers can default on the contracts some times, like now. ET was negotiating for better longer terms contracts during 2019. their earnings do have a little sensitivity to oil price in the short term, tariff adjustments based on oil price are written into the contracts. Plus, they can make or lose money based on fluctuation in the price of their oil inventories, ie. contango or backwardation. Longer term when prices are lower, the basin production will decline, and midstream earnings will decline too, as pipeline utilization rates decline.
bengalesq profile picture
I like them both. Throw KMI in too for good measure.
elliot_mllr profile picture
The article ignores the Kelcy Warren factor as a reason why ET needs so high a yield to attract unit buyers. The two managements are not similar. EPD is far more unitholder friendly and stable.
Elliot Miller
KW gets a bad rap on this comment threads, but he is one of the better midstream execs. he's very experienced and seen it all
KamilAgrawala profile picture
Thanks but no thanks on ET. I added for the long term EPD during March lows as I knew the dividend was secure and management has a great track record. Debt levels for EPD are also industry lows. Other than this I invested in XOM & CVX to wrap up my oil exposure. 50% in EPD, 25% in XOM and 25% CVX. Worked great so far. Quality of clients is important and EPD has financially sound customers. I use the dividends opportunistically either drip or to invest in other companies in my portfolio.
2ys4u profile picture
Forgot to mention every quarter ET missese EPD hits for goes above. also look at the number of employees on each I believe EPD is about half the employees of Et
Ray Merola profile picture
Energy Transfer offers more upside capital appreciation, but entails considerably more risk. Enterprise is a solid, all-around company; offering a lower distribution yield, but a more stable ride. Think of it like riding in a limo versus a sports car with the top down.

ET isn't on the brink of a ratings cut. No, not at all. The company has a year to to a year-and-a-half to show improvement: moving from ~5.5x leverage down to ~5x. There's several ways to compute leverage, so this isn't the place to get into that.

Prior to COVID and the KSA/Russia oil price war, ET was on the brink of 4.5x leverage. Management is focused upon this. IMHO, they will sacrifice the distribution before taking a credit rating hit. However, if the company can generate over $10 billion adjusted EBITDA in 2020, it will take a great deal of pressure off the situation. Personally, I doubt ET can make management current $10.7 billion EBITDA midpoint guidance. But $10 billion? Possible. Recommend good investors read up on it, consider scenarios / risks, then make the most informed decision they can.

ET management has shown a propensity to pulls rabbits out of hats. They've dodged solvency issues, lawsuits, Left-Green obstruction, overturned (after validly obtained) permits, and three separate energy price crashes (2008, 2015, and 2020). Somehow, each time they hang on and continue to provide an outsized distribution. The unit price cycles up and down. In 2018, it was $18. Now one can buy units at $8. What's Fair Value? Well, right now it's ~$13 or $14, depending upon reasonably successful resolution of the most recent developments. Current yield 14%.

EPD is more of a SWAN equity, but not entirely. I suspect it's heading towards $27 or $28. Current yield 9%.
andrew19067 profile picture
I own ET and my daily driver is a '68 MGB roadster. Go for broke or go home!
Ray Merola profile picture
KW was quoted as saying, "Go Big or Go Home."
lsuavecito profile picture

I own both, 2.5X more of EPD, and my daily driver is is a '79 MB, 450 SEL, 6.9.
I stay home and SWAN:-)
ETs geographical production basin diversification is looking good. While, Permian midstream utilization is forecast to decline to 60%. Bakken midstream is forecast to be at 80% utilization, which may explain the recent trend in ET share price. Thank KW for that
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