Assessing Enterprise Products Partners LP.’s ( NYSE:EPD ) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess EPD’s recent performance announced on 31 March 2018 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Enterprise Products Partners
Did EPD beat its long-term earnings growth trend and its industry?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to examine many different companies on a more comparable basis, using the latest information. For Enterprise Products Partners, its most recent bottom-line (trailing twelve month) is US$2.92B, which compared to last year’s figure, has increased by 12.46%. Since these values are somewhat short-term, I’ve calculated an annualized five-year figure for Enterprise Products Partners’s earnings, which stands at US$2.47B This suggests that, on average, Enterprise Products Partners has been able to gradually grow its profits over the past couple of years as well.
What’s enabled this growth? Well, let’s take a look at if it is only because of an industry uplift, or if Enterprise Products Partners has experienced some company-specific growth. In the past couple of years, Enterprise Products Partners expanded bottom-line, while its top-line declined, by effectively controlling its costs. This resulted in to a margin expansion and profitability over time. Inspecting growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 25.04% over the previous year, . This is a turnaround from a volatile drop of -5.08% in the past few years. This means in the recent industry expansion, Enterprise Products Partners has not been able to gain as much as its industry peers.
What does this mean?
Though Enterprise Products Partners’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Enterprise Products Partners to get a better picture of the stock by looking at:
- Future Outlook : What are well-informed industry analysts predicting for EPD’s future growth? Take a look at our free research report of analyst consensus for EPD’s outlook.
- Financial Health : Is EPD’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here .
- Other High-Performing Stocks : Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here .
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.