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What Does Enterprise Products Partners’s Leverage Indicate?

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Jan. 25 2017, Updated 10:36 a.m. ET

EPD’s debt-to-equity ratio

Enterprise Products Partners’s (EPD) debt-to-equity ratio is 1.1x. A debt-to-equity ratio of 1.1x is generally considered conservative for MLPs. EPD’s ratio has not exceeded 1.3x over the last four years.

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EPD’s net debt-to-EBITDA ratio

The above graph shows EPD’s debt-to-adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] ratios over the last seven years. EPD’s debt-to-EBITDA ratio was below 4x until 2014. It increased to 4.5x by the end of 3Q16.

One of the key factors that investors should watch in EPD’s upcoming earnings release would be how its leverage stands at the end of 2016.

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