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Enterprise Products’ Stock Rises 3% on 2016 Distribution Guidance


Jan. 5 2016, Updated 9:02 a.m. ET

Purchase of EPD units

Enterprise Products Partners (EPD) announced yesterday that affiliates of its general partner and EPCO (Enterprise Products Company) have purchased ~3.8 million common units of EPD for ~$100 million through EPD’s at-the-market equity issuance program. EPCO intends to purchase a total of $200 million of Enterprise Products Partners’ common units during the first quarter of 2016. EPCO and its affiliates own ~34% of EPD’s common units. Enterprise Products Partners will use the proceeds from these purchases to fund a portion of its growth capital investments.

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A.J. “Jim” Teague, EPD’s chief executive officer, stated, “EPCO and our general partner continue to be supportive of Enterprise’s growth,” He went on to add, “From 2010 through 2015, EPCO purchased approximately $635 million of common units directly from the partnership to provide capital for growth projects. In 2010, EPCO also facilitated the elimination of our general partner incentive distribution rights in a nontaxable transaction for our partners.”

EPD’s stock rises 3%

Enterprise Products Partners’ (EPD) stock rose 3.4% in yesterday’s trade after EPD announced 4Q15 distributions, guidance for 2016 distributions, and EPCO’s purchase of EPD’s units. The Alerian MLP ETF (AMLP), on the other hand, rose only 0.9% yesterday. The above graph shows EPD’s stock price, along with its 50-day and 200-day moving averages. EPD is currently trading 4.2% above its 50-day moving average.

EPD generated a total return of -26% in 2015. In comparison, Enbridge Energy Partners (EEP), Williams Partners (WPZ), and Energy Transfer Partners (ETP) generated total returns of -38%, -41%, and -44%, respectively, in 2015.


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