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.
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.