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Why High Leverage Isn’t a Concern for Enable Midstream Partners

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Aug. 18 2020, Updated 6:18 a.m. ET

Enable Midstream Partners’ outstanding debt

In the previous part of this series, we looked at Enable Midstream Partners’ (ENBL) cash flow measures. In this part, we’ll analyze ENBL’s balance sheet position. The company ended 3Q16 with a total outstanding debt of $3.1 billion, which is $442.0 million higher than at the end of 2015.

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Enable Midstream’s net debt-to-EBITDA

Enable Midstream Partners’ net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple was 3.8x at the end of 3Q16. That figure is higher than its average net debt-to-EBITDA multiple of 3.2x for the last ten quarters. However, the multiple is within industry standards. MLPs generally target a ratio of 4.0x–4.5x.

Enable Midstream Partners’ leverage is also less than most of its peers, including Western Gas Partners (WES), EnLink Midstream Partners (ENLK), and Summit Midstream Partners (SMLP).

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