Boardwalk Pipeline’s enterprise value
Boardwalk Pipeline Partners (BWP) has the second highest enterprise value of $7.6 billion among the selected peers. BWP is preceded by Spectra Energy Partners (SEP). The enterprise value—approximately equal to market equity value plus the net debt (debt less cash)—is an important metric for the valuation of the entire business.
Equity value alone just gives the value to equity holders. BWP has a lower market cap compared to EQT Midstream Partners (EQM), but it still has a higher enterprise value. This indicated BWP’s higher outstanding debt.
Boardwalk Pipeline’s EV-to-EBITDA multiple
BWP’s forward EV-to-EBITDA[1. earnings before interest, taxes, depreciation, and amortization] multiple of 9.6x is the lowest among the selected peers. TC Pipelines (TCP) has the highest forward EV-to-EBITDA of 14.5x.
Boardwalk Pipeline’s operating margin
BWP has the lowest operating margin among the selected peer group despite its stable fee-based revenue from firm contracts. This could be attributed to BWP’s involvement in few low-margin NGLs (natural gas liquids) businesses.
EQT Midstream Partners has the highest operating margin of 71.3%. However, BWP’s operating margin is better compared to most other peers.
Boardwalk Pipeline’s distribution yield
Boardwalk Pipeline Partners (BWP) has the lowest distribution yield of 2.4% among the selected peers. BWP’s low distribution yield reflects its distribution cut and improvement in its market performance.
In the next part, we’ll analyze Boardwalk Pipeline’s exposure to commodity prices.