Intrinsic value of Enable Midstream Partners - ENBL

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$15.71

  Intrinsic Value

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  Value-price divergence*

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$15.71

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ENBL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 6.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -6.04
  8.50
  8.15
  7.83
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
Revenue, $m
  2,272
  2,465
  2,666
  2,875
  3,092
  3,318
  3,552
  3,796
  4,049
  4,313
  4,587
  4,872
  5,169
  5,479
  5,801
  6,138
  6,489
  6,855
  7,238
  7,638
  8,056
  8,493
  8,950
  9,429
  9,929
  10,454
  11,003
  11,578
  12,180
  12,811
  13,473
Variable operating expenses, $m
 
  3,190
  3,450
  3,720
  4,001
  4,293
  4,596
  4,912
  5,239
  5,580
  5,935
  6,304
  6,689
  7,089
  7,507
  7,942
  8,397
  8,871
  9,366
  9,884
  10,425
  10,990
  11,582
  12,201
  12,849
  13,527
  14,237
  14,981
  15,761
  16,578
  17,434
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,887
  3,190
  3,450
  3,720
  4,001
  4,293
  4,596
  4,912
  5,239
  5,580
  5,935
  6,304
  6,689
  7,089
  7,507
  7,942
  8,397
  8,871
  9,366
  9,884
  10,425
  10,990
  11,582
  12,201
  12,849
  13,527
  14,237
  14,981
  15,761
  16,578
  17,434
Operating income, $m
  385
  -725
  -784
  -845
  -909
  -975
  -1,044
  -1,116
  -1,190
  -1,268
  -1,348
  -1,432
  -1,520
  -1,611
  -1,706
  -1,805
  -1,908
  -2,015
  -2,128
  -2,246
  -2,369
  -2,497
  -2,631
  -2,772
  -2,919
  -3,073
  -3,235
  -3,404
  -3,581
  -3,767
  -3,961
EBITDA, $m
  723
  -347
  -375
  -404
  -435
  -466
  -499
  -534
  -569
  -606
  -645
  -685
  -727
  -770
  -816
  -863
  -912
  -964
  -1,018
  -1,074
  -1,133
  -1,194
  -1,258
  -1,326
  -1,396
  -1,470
  -1,547
  -1,628
  -1,713
  -1,801
  -1,894
Interest expense (income), $m
  0
  105
  115
  125
  136
  148
  160
  172
  185
  198
  212
  227
  242
  257
  274
  291
  309
  327
  346
  367
  388
  410
  433
  457
  482
  509
  536
  565
  596
  627
  661
Earnings before tax, $m
  314
  -830
  -899
  -971
  -1,045
  -1,123
  -1,204
  -1,288
  -1,375
  -1,466
  -1,561
  -1,659
  -1,761
  -1,868
  -1,979
  -2,095
  -2,216
  -2,343
  -2,474
  -2,612
  -2,756
  -2,907
  -3,064
  -3,229
  -3,401
  -3,582
  -3,771
  -3,969
  -4,176
  -4,394
  -4,622
Tax expense, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  312
  -830
  -899
  -971
  -1,045
  -1,123
  -1,204
  -1,288
  -1,375
  -1,466
  -1,561
  -1,659
  -1,761
  -1,868
  -1,979
  -2,095
  -2,216
  -2,343
  -2,474
  -2,612
  -2,756
  -2,907
  -3,064
  -3,229
  -3,401
  -3,582
  -3,771
  -3,969
  -4,176
  -4,394
  -4,622

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  6
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  11,212
  12,143
  13,133
  14,162
  15,232
  16,343
  17,498
  18,698
  19,946
  21,244
  22,594
  24,000
  25,463
  26,988
  28,578
  30,235
  31,965
  33,770
  35,656
  37,626
  39,685
  41,839
  44,091
  46,447
  48,914
  51,496
  54,200
  57,033
  60,000
  63,110
  66,370
Adjusted assets (=assets-cash), $m
  11,206
  12,143
  13,133
  14,162
  15,232
  16,343
  17,498
  18,698
  19,946
  21,244
  22,594
  24,000
  25,463
  26,988
  28,578
  30,235
  31,965
  33,770
  35,656
  37,626
  39,685
  41,839
  44,091
  46,447
  48,914
  51,496
  54,200
  57,033
  60,000
  63,110
  66,370
Revenue / Adjusted assets
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
  0.203
Average production assets, $m
  10,457
  11,344
  12,269
  13,230
  14,229
  15,268
  16,347
  17,468
  18,634
  19,846
  21,108
  22,421
  23,788
  25,212
  26,697
  28,246
  29,862
  31,549
  33,310
  35,151
  37,074
  39,086
  41,190
  43,391
  45,695
  48,108
  50,634
  53,280
  56,053
  58,958
  62,003
Working capital, $m
  34
  30
  32
  34
  37
  40
  43
  46
  49
  52
  55
  58
  62
  66
  70
  74
  78
  82
  87
  92
  97
  102
  107
  113
  119
  125
  132
  139
  146
  154
  162
Total debt, $m
  2,993
  3,279
  3,582
  3,897
  4,224
  4,564
  4,917
  5,285
  5,667
  6,064
  6,477
  6,907
  7,355
  7,821
  8,308
  8,815
  9,344
  9,897
  10,474
  11,077
  11,707
  12,366
  13,055
  13,776
  14,531
  15,321
  16,148
  17,015
  17,923
  18,875
  19,872
Total liabilities, $m
  3,430
  3,716
  4,019
  4,334
  4,661
  5,001
  5,354
  5,722
  6,104
  6,501
  6,914
  7,344
  7,792
  8,258
  8,745
  9,252
  9,781
  10,334
  10,911
  11,514
  12,144
  12,803
  13,492
  14,213
  14,968
  15,758
  16,585
  17,452
  18,360
  19,312
  20,309
Total equity, $m
  7,782
  8,428
  9,114
  9,829
  10,571
  11,342
  12,143
  12,977
  13,843
  14,743
  15,680
  16,656
  17,671
  18,730
  19,833
  20,983
  22,184
  23,437
  24,745
  26,113
  27,542
  29,036
  30,599
  32,234
  33,946
  35,738
  37,615
  39,581
  41,640
  43,799
  46,061
Total liabilities and equity, $m
  11,212
  12,144
  13,133
  14,163
  15,232
  16,343
  17,497
  18,699
  19,947
  21,244
  22,594
  24,000
  25,463
  26,988
  28,578
  30,235
  31,965
  33,771
  35,656
  37,627
  39,686
  41,839
  44,091
  46,447
  48,914
  51,496
  54,200
  57,033
  60,000
  63,111
  66,370
Debt-to-equity ratio
  0.385
  0.390
  0.390
  0.400
  0.400
  0.400
  0.400
  0.410
  0.410
  0.410
  0.410
  0.410
  0.420
  0.420
  0.420
  0.420
  0.420
  0.420
  0.420
  0.420
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
Adjusted equity ratio
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694
  0.694

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  312
  -830
  -899
  -971
  -1,045
  -1,123
  -1,204
  -1,288
  -1,375
  -1,466
  -1,561
  -1,659
  -1,761
  -1,868
  -1,979
  -2,095
  -2,216
  -2,343
  -2,474
  -2,612
  -2,756
  -2,907
  -3,064
  -3,229
  -3,401
  -3,582
  -3,771
  -3,969
  -4,176
  -4,394
  -4,622
Depreciation, amort., depletion, $m
  338
  378
  409
  441
  474
  509
  545
  582
  621
  662
  704
  747
  793
  840
  890
  942
  995
  1,052
  1,110
  1,172
  1,236
  1,303
  1,373
  1,446
  1,523
  1,604
  1,688
  1,776
  1,868
  1,965
  2,067
Funds from operations, $m
  753
  -451
  -490
  -530
  -571
  -614
  -659
  -706
  -754
  -805
  -857
  -912
  -969
  -1,028
  -1,089
  -1,154
  -1,221
  -1,291
  -1,364
  -1,441
  -1,520
  -1,604
  -1,691
  -1,783
  -1,878
  -1,978
  -2,083
  -2,193
  -2,308
  -2,429
  -2,555
Change in working capital, $m
  32
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
Cash from operations, $m
  721
  -461
  -492
  -532
  -574
  -617
  -662
  -709
  -757
  -808
  -860
  -915
  -972
  -1,031
  -1,093
  -1,158
  -1,225
  -1,295
  -1,369
  -1,445
  -1,525
  -1,609
  -1,697
  -1,788
  -1,884
  -1,985
  -2,090
  -2,200
  -2,315
  -2,436
  -2,563
Maintenance CAPEX, $m
  0
  -349
  -378
  -409
  -441
  -474
  -509
  -545
  -582
  -621
  -662
  -704
  -747
  -793
  -840
  -890
  -942
  -995
  -1,052
  -1,110
  -1,172
  -1,236
  -1,303
  -1,373
  -1,446
  -1,523
  -1,604
  -1,688
  -1,776
  -1,868
  -1,965
New CAPEX, $m
  -383
  -888
  -925
  -961
  -999
  -1,038
  -1,079
  -1,121
  -1,166
  -1,212
  -1,261
  -1,313
  -1,367
  -1,425
  -1,485
  -1,549
  -1,616
  -1,687
  -1,762
  -1,840
  -1,924
  -2,011
  -2,104
  -2,201
  -2,304
  -2,412
  -2,526
  -2,646
  -2,772
  -2,905
  -3,045
Cash from investing activities, $m
  -367
  -1,237
  -1,303
  -1,370
  -1,440
  -1,512
  -1,588
  -1,666
  -1,748
  -1,833
  -1,923
  -2,017
  -2,114
  -2,218
  -2,325
  -2,439
  -2,558
  -2,682
  -2,814
  -2,950
  -3,096
  -3,247
  -3,407
  -3,574
  -3,750
  -3,935
  -4,130
  -4,334
  -4,548
  -4,773
  -5,010
Free cash flow, $m
  354
  -1,698
  -1,795
  -1,902
  -2,014
  -2,130
  -2,250
  -2,375
  -2,505
  -2,641
  -2,783
  -2,932
  -3,087
  -3,249
  -3,419
  -3,596
  -3,782
  -3,977
  -4,182
  -4,396
  -4,621
  -4,856
  -5,104
  -5,363
  -5,635
  -5,920
  -6,220
  -6,534
  -6,864
  -7,210
  -7,573
Issuance/(repayment) of debt, $m
  -37
  286
  303
  315
  327
  340
  353
  367
  382
  397
  413
  430
  448
  467
  486
  507
  529
  553
  577
  603
  630
  659
  689
  721
  755
  790
  827
  867
  908
  952
  997
Issuance/(repurchase) of shares, $m
  499
  2,057
  2,179
  2,302
  2,429
  2,561
  2,698
  2,841
  2,990
  3,145
  3,307
  3,477
  3,655
  3,841
  4,035
  4,240
  4,454
  4,678
  4,913
  5,161
  5,420
  5,692
  5,977
  6,277
  6,592
  6,922
  7,269
  7,633
  8,015
  8,417
  8,838
Cash from financing (excl. dividends), $m  
  226
  2,343
  2,482
  2,617
  2,756
  2,901
  3,051
  3,208
  3,372
  3,542
  3,720
  3,907
  4,103
  4,308
  4,521
  4,747
  4,983
  5,231
  5,490
  5,764
  6,050
  6,351
  6,666
  6,998
  7,347
  7,712
  8,096
  8,500
  8,923
  9,369
  9,835
Total cash flow (excl. dividends), $m
  580
  -1,412
  -1,492
  -1,587
  -1,687
  -1,789
  -1,896
  -2,008
  -2,124
  -2,244
  -2,370
  -2,502
  -2,639
  -2,782
  -2,932
  -3,089
  -3,253
  -3,425
  -3,605
  -3,793
  -3,991
  -4,198
  -4,414
  -4,642
  -4,880
  -5,130
  -5,392
  -5,667
  -5,956
  -6,258
  -6,576
Retained Cash Flow (-), $m
  -263
  -652
  -687
  -714
  -742
  -771
  -802
  -833
  -866
  -901
  -937
  -975
  -1,016
  -1,058
  -1,103
  -1,150
  -1,200
  -1,253
  -1,309
  -1,367
  -1,429
  -1,494
  -1,563
  -1,635
  -1,712
  -1,792
  -1,877
  -1,966
  -2,060
  -2,158
  -2,262
Prev. year cash balance distribution, $m
 
  6
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Discount rate, %
 
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  77.1
  59.7
  46.5
  36.4
  28.6
  22.6
  17.9
  14.2
  11.3
  9.0
  7.2
  5.8
  4.7
  3.8
  3.0
  2.4
  2.0
  1.6
  1.3
  1.1
  0.9
  0.7
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.2
  0.1

Enable Midstream Partners, LP owns, operates, and develops midstream energy infrastructure assets in the United States. It operates in two segments, Gathering and Processing, and Transportation and Storage. The Gathering and Processing segment provides natural gas gathering, processing, and fractionation services in the Anadarko, Arkoma, and Ark-La-Tex basins, as well as crude oil gathering services in the Bakken Shale formation of the Williston Basin for its producer customers. The Transportation and Storage segment offers interstate and intrastate natural gas pipeline transportation and storage services to natural gas producers, utilities, and industrial customers. The company’s natural gas gathering and processing assets are located in Oklahoma, Texas, Arkansas, and Louisiana; crude oil gathering assets are located in North Dakota; and natural gas transportation and storage assets extend from western Oklahoma and the Texas Panhandle to Louisiana, from Louisiana to Illinois, in Oklahoma, and from Louisiana to Alabama. As of December 31, 2016, its portfolio of midstream energy infrastructure assets included approximately 12,900 miles of gathering pipelines; 14 processing plants with 2.5 billion cubic feet per day of processing capacity; approximately 7,800 miles of interstate pipelines; approximately 2,200 miles of intrastate pipelines; and 8 natural gas storage facilities with 85.0 billion cubic feet of storage capacity. The company is based in Oklahoma City, Oklahoma. Enable Midstream Partners, LP is a subsidiary of CenterPoint Energy, Inc.

FINANCIAL RATIOS  of  Enable Midstream Partners (ENBL)

Valuation Ratios
P/E Ratio 21.8
Price to Sales 3
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 9.4
Price to Free Cash Flow 20.1
Growth Rates
Sales Growth Rate -6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -55.9%
Cap. Spend. - 3 Yr. Gr. Rate -7.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 38.5%
Total Debt to Equity 38.5%
Interest Coverage 0
Management Effectiveness
Return On Assets 2.8%
Ret/ On Assets - 3 Yr. Avg. 0.3%
Return On Total Capital 2.9%
Ret/ On T. Cap. - 3 Yr. Avg. 0.3%
Return On Equity 4.1%
Return On Equity - 3 Yr. Avg. 0.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 55.2%
Gross Margin - 3 Yr. Avg. 51%
EBITDA Margin 28.7%
EBITDA Margin - 3 Yr. Avg. 11.3%
Operating Margin 16.9%
Oper. Margin - 3 Yr. Avg. 1.6%
Pre-Tax Margin 13.8%
Pre-Tax Margin - 3 Yr. Avg. -0.7%
Net Profit Margin 13.7%
Net Profit Margin - 3 Yr. Avg. -0.5%
Effective Tax Rate 0.3%
Eff/ Tax Rate - 3 Yr. Avg. 0.2%
Payout Ratio 179.8%

ENBL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENBL stock intrinsic value calculation we used $2272 million for the last fiscal year's total revenue generated by Enable Midstream Partners. The default revenue input number comes from 2016 income statement of Enable Midstream Partners. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ENBL stock valuation model: a) initial revenue growth rate of 8.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.2%, whose default value for ENBL is calculated based on our internal credit rating of Enable Midstream Partners, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Enable Midstream Partners.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ENBL stock the variable cost ratio is equal to 129.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ENBL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Enable Midstream Partners.

Corporate tax rate of 27% is the nominal tax rate for Enable Midstream Partners. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ENBL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ENBL are equal to 460.2%.

Life of production assets of 30.9 years is the average useful life of capital assets used in Enable Midstream Partners operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ENBL is equal to 1.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $7782 million for Enable Midstream Partners - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 440.959 million for Enable Midstream Partners is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Enable Midstream Partners at the current share price and the inputted number of shares is $6.9 billion.


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COMPANY NEWS

▶ Midstream Stocks: Returns and Implied Volatilities   [Apr-13-17 01:05PM  Market Realist]
▶ A 4% Yield and a Century of Dividends   [Feb-27-17 11:14AM  GuruFocus.com]
▶ Enable Midstream Partners Prices Offering of Common Units   [Nov-22-16 11:34PM  Business Wire]
▶ 4 MLPs that May Have the Safest Pipelines   [Nov-16-16 01:29PM  at Barrons.com]
▶ [$$] Three Reasons CenterPoint Stock Will Underperform   [Nov-09-16 01:25AM  at Barrons.com]
Stock chart of ENBL Financial statements of ENBL Annual reports of ENBL
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