Top 5 Things You Need to Know About Enterprise Products Partners

Today we're going to take a closer look at large-cap Utilities company Enterprise Products Partners, whose shares are currently trading at $26.64. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

A Very Low P/E Ratio but Trades Above Its Graham Number:

Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company belongs to the Utilities sector, which has an average price to earnings (P/E) ratio of 22.89 and an average price to book (P/B) ratio of 1.03. In contrast, Enterprise Products Partners has a trailing 12 month P/E ratio of 10.5 and a P/B ratio of 2.16.

Enterprise Products Partners's PEG ratio is 1.95, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Exceptional Profitability Overshadowed by Excessive Leverage:

2020-02-28 2021-03-01 2022-02-28 2023-02-28
Revenue (MM) $32,789 $27,200 $40,807 $58,186
Gross Margins 95.7% n/a n/a n/a
Operating Margins 17.2% 19.0% 15.3% 12.1%
Net Margins 14.0% 13.88% 11.37% 9.44%
Net Income (MM) $4,591 $3,776 $4,638 $5,490
Net Interest Expense (MM) -$1,231 -$1,274 -$1,278 -$1,233
Depreciation & Amort. (MM) -$1,745 -$1,840 -$1,874 -$1,974
Earnings Per Share $2.09 $1.71 $2.11 $2.54
EPS Growth n/a -18.18% 23.39% 20.38%
Diluted Shares (MM) 2,202 2,202 2,200 2,175
Free Cash Flow (MM) $11,032 $9,166 $10,672 $9,881
Capital Expenditures (MM) -$4,511 -$3,275 -$2,159 -$1,842
Net Current Assets (MM) -$28,043 -$28,771 -$27,768 -$29,759
Current Ratio 0.86 1.1 1.14 0.86
Long Term Debt (MM) $25,643 $28,541 $28,135 $26,551
Net Debt / EBITDA 3.63 4.11 3.46 3.28

Enterprise Products Partners benefits from strong margins with a negative growth trend, a steady stream of strong cash flows, and growing revenues and decreasing reinvestment in the business. The company's financial statements show wider gross margins than its peer group and positive EPS growth. However, the firm has a highly leveraged balance sheet.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.