EPD, ETP, PAA, WPZ: What Do Current Valuations Indicate?


Nov. 20 2020, Updated 11:39 a.m. ET

EV-to-EBITDA multiples

Energy Transfer Partners (ETP) and Enterprise Products Partners (EPD) are trading at forward EV-to-EBITDA multiples below their respective five-year historical averages, which indicates that ETP and EPD may be undervalued relative to their historical valuation.

The above graph compares the forward EV-to-EBITDA multiples of ETP, EPD, Plains All American Pipeline (PAA), and Williams Partners (WPZ) with their respective five-year average multiples.

As the graph shows, ETP’s multiple is also the lowest among the four MLPs. EPD’s EV-to-EBITDA, on the other hand, is the highest among the selected companies. Notably, EPD has historically traded at a slight premium valuation compared to peers based on its superior risk-return metrics.

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Energy Transfer Partners is currently trading at a distribution yield of ~11.5%. In comparison, Plains All American Pipeline, Enterprise Products Partners, and Williams Partners are currently trading at yields of 9.4%, 6.2%, and 7.8%, respectively.

Learn more about MLPs that offer attractive yields in ETP, EEP, PAA, GEL Currently Yield above 9%: What Are the Risks?

Let’s take a look at moving averages and the recent performance of frac-sand producing MLP Hi-Crush Partners (HCLP) in the next part of the series.


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