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When Will Energy Transfer Partners Resume Distribution Growth?

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Dec. 4 2020, Updated 10:53 a.m. ET

Energy Transfer Partners

Energy Transfer Partners (ETP) declared a distribution of $1.06 per unit in 2Q16. This represented a 1.9% YoY rise compared to 2Q15. However, ETP’s distribution has remained flat for the last three quarters.

ETP’s flat distribution is due to its high leverage and low coverage. On ETP’s distribution growth resumption, Kelcy Warren, ETP’s CEO, said, “It’s our intention that ETP should not be hanging around the one coverage ratio. It should be hanging around a 1.1 to 1.15 coverage ratio going forward. Now, that’s not to get anybody depressed that we don’t have an aggressive distribution strategy. We do, but I think our number one focus right now is to get ETP into that healthy zone of coverage. And then, we will resume distribution increases.”

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Energy Transfer Equity

Energy Transfer Equity (ETE) declared a distribution of $0.29 per unit in 2Q16. This represented a 7.5% YoY rise over 2Q15. ETE’s distribution has also remained flat over the last three quarters despite impressive distribution coverage. ETE’s distribution could remain flat, as its excess cash flow will be used to support its subsidiary’s balance sheet. We’ll learn more about this in the next article.

Sunoco Logistics Partners

Sunoco Logistics Partners’ (SXL) distribution has continued to grow for 45 consecutive quarters. SXL declared a distribution of $0.50 per common unit in 2Q16. This represented a 14.1% YoY rise over 2Q15 and a sequential rise of 2.2%.

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