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Energy Transfer And Enterprise Products Partners: On Sale With An Explosive Yield

Published Tue, 30 Jun 2020 05:19:34 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | Basic MaterialsEnergy Transfer And Enterprise Products Partners: On Sale With An Explosive YieldJun. 30, 2020 5:19 AM ET|| About: Enterprise Products Partners L.P. (EPD), ETby: FluidsdocFluidsdoc The Daily Drilling Report40 years of oilfield and analyst experience to work to find you winners.SummaryWe think the pipeline MLPs are value traps with little or no upside outside of their current trading range.
There are structural problems in the fundamental thesis for any of them.
Oil volumes are on the decline and gas is in extreme oversupply.
We don't see a reason to own them despite the out-sized distributions they pay currently.
Distributions that may be at risk. This is not a bullish article on either ET or EPD.
Introduction
It's Sunday morning, on the early side as I start this article, so perhaps you'll permit me a moment to ramble and reminisce a bit. I do have a point with this little epistle. It'll take a moment, but I will get to it.
I was never really one of the cool kids growing up. When the other kids were going to dances and debutante balls, and hanging out at Crystal Lake, I was down in the cellar pouring NaCl granules into D.I. water just to see how much it would hold before precipitating, or "salting out." Then raising the temperature and starting again, keeping careful track of my results in my Nalgene lab notebook, as any good junior scientist would do. Good times! I can still hear my mom calling down to me at dinner time...
"Fluidsdoc (even mom called me that), come upstairs for dinner, and be sure to turn off that noisy old roller oven before you do." After a moment..."Be sure and wash your hands, Lord knows... that boy!" Mom was tolerant about my passion for drilling fluids - she'd bought me that oven for my 11th birthday, but never really grasped the concept of inducing dynamic stress aging on fluids performance targets, her eyes would just sort of glass over when I would explain the idea. Mom... Read more