What Does Spectra Energy’s Leverage Indicate?



Spectra Energy’s debt-to-equity ratio

Spectra Energy’s (SE) debt-to-equity ratio is currently 1.3x. Its 2Q16 debt-to-equity ratio has fallen compared to 1.4x in 1Q16. A ratio of 1.3x is generally considered conservative.

Spectra Energy’s debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio is 6.8x. The ratio remained stable in 2Q16 compared to the previous quarter. However, it rose significantly in 4Q15 and has remained on the higher side since then.

The above graph shows Spectra Energy’s quarterly debt-to-equity and debt-to-EBITDA ratios over the last three years. In comparison, Enterprise Products Partners (EPD) has a debt-to-EBITDA ratio of 4.5x.

Article continues below advertisement

More From Market Realist