Enterprise Products Partners LP (EPD)

[Timothy Smith]

Along with energy prices, even though a lot of them don’t have a direct exposure in energy prices. So take a look at some of the master limited partnerships like Enterprise Products Partners (EPD).

That’s been one of your favorites for a long time.
One of my favorites for a long time. It’s always a good one to pick up when the price comes down.

Now, they run pipelines, or do they?

A lot of what’s fee-based assets. So in other words, pipelines, processing facilities, various assets that just generate fees from very credit-worthy customers, such as super oils, which are actually rated higher now than Uncle Sam, many of them.

So you get that type of credit. You’ve got very, very low borrowing rates, very low cost of capital for these companies. And for Enterprise, it can basically just go out there, pick projects, almost completely contract them in advance, raise the money very cheaply.

It adds to cash flow, and it adds to dividends. They’ve increased dividends 29 quarters in a row. That covers you through 2008, when oil prices went from $150 to less than $30 in just a few months, so it covers a lot of territory and it really shows you how bulletproof a company like that is.

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