Intrinsic value of EnLink Midstream - ENLC

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$17.25

  Intrinsic Value

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  Value-price divergence*

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

We calculate the intrinsic value of ENLC 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 3.1

 

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, %
  -4.49
  14.80
  13.82
  12.94
  12.14
  11.43
  10.79
  10.21
  9.69
  9.22
  8.80
  8.42
  8.08
  7.77
  7.49
  7.24
  7.02
  6.82
  6.63
  6.47
  6.32
  6.19
  6.07
  5.97
  5.87
  5.78
  5.70
  5.63
  5.57
  5.51
  5.46
Revenue, $m
  4,252
  4,881
  5,556
  6,275
  7,037
  7,841
  8,687
  9,574
  10,501
  11,469
  12,478
  13,528
  14,621
  15,756
  16,937
  18,163
  19,438
  20,763
  22,140
  23,573
  25,064
  26,615
  28,232
  29,916
  31,671
  33,502
  35,413
  37,408
  39,492
  41,669
  43,945
Variable operating expenses, $m
 
  6,289
  7,136
  8,040
  8,997
  10,008
  11,071
  12,186
  13,351
  14,568
  15,836
  17,001
  18,374
  19,802
  21,285
  22,826
  24,428
  26,093
  27,824
  29,625
  31,498
  33,448
  35,480
  37,596
  39,802
  42,104
  44,505
  47,012
  49,630
  52,367
  55,227
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
  4,927
  6,289
  7,136
  8,040
  8,997
  10,008
  11,071
  12,186
  13,351
  14,568
  15,836
  17,001
  18,374
  19,802
  21,285
  22,826
  24,428
  26,093
  27,824
  29,625
  31,498
  33,448
  35,480
  37,596
  39,802
  42,104
  44,505
  47,012
  49,630
  52,367
  55,227
Operating income, $m
  -675
  -1,407
  -1,581
  -1,765
  -1,961
  -2,167
  -2,384
  -2,612
  -2,850
  -3,099
  -3,358
  -3,473
  -3,754
  -4,045
  -4,348
  -4,663
  -4,990
  -5,331
  -5,684
  -6,052
  -6,435
  -6,833
  -7,248
  -7,680
  -8,131
  -8,601
  -9,092
  -9,604
  -10,139
  -10,698
  -11,282
EBITDA, $m
  -171
  -799
  -910
  -1,027
  -1,152
  -1,284
  -1,422
  -1,568
  -1,719
  -1,878
  -2,043
  -2,215
  -2,394
  -2,580
  -2,773
  -2,974
  -3,183
  -3,400
  -3,625
  -3,860
  -4,104
  -4,358
  -4,622
  -4,898
  -5,186
  -5,485
  -5,798
  -6,125
  -6,466
  -6,823
  -7,195
Interest expense (income), $m
  134
  138
  191
  247
  307
  370
  437
  507
  580
  657
  738
  822
  909
  999
  1,094
  1,192
  1,293
  1,399
  1,509
  1,624
  1,742
  1,866
  1,995
  2,129
  2,269
  2,415
  2,567
  2,725
  2,891
  3,064
  3,245
Earnings before tax, $m
  -884
  -1,546
  -1,772
  -2,012
  -2,267
  -2,537
  -2,821
  -3,119
  -3,431
  -3,756
  -4,095
  -4,295
  -4,662
  -5,045
  -5,442
  -5,855
  -6,284
  -6,730
  -7,193
  -7,676
  -8,177
  -8,699
  -9,243
  -9,810
  -10,400
  -11,016
  -11,658
  -12,329
  -13,030
  -13,762
  -14,527
Tax expense, $m
  4
  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
  -460
  -1,546
  -1,772
  -2,012
  -2,267
  -2,537
  -2,821
  -3,119
  -3,431
  -3,756
  -4,095
  -4,295
  -4,662
  -5,045
  -5,442
  -5,855
  -6,284
  -6,730
  -7,193
  -7,676
  -8,177
  -8,699
  -9,243
  -9,810
  -10,400
  -11,016
  -11,658
  -12,329
  -13,030
  -13,762
  -14,527

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  205
  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
  10,276
  11,567
  13,166
  14,869
  16,675
  18,581
  20,585
  22,686
  24,884
  27,178
  29,569
  32,057
  34,646
  37,337
  40,134
  43,041
  46,061
  49,201
  52,465
  55,860
  59,392
  63,070
  66,899
  70,890
  75,050
  79,389
  83,917
  88,645
  93,582
  98,741
  104,134
Adjusted assets (=assets-cash), $m
  10,071
  11,567
  13,166
  14,869
  16,675
  18,581
  20,585
  22,686
  24,884
  27,178
  29,569
  32,057
  34,646
  37,337
  40,134
  43,041
  46,061
  49,201
  52,465
  55,860
  59,392
  63,070
  66,899
  70,890
  75,050
  79,389
  83,917
  88,645
  93,582
  98,741
  104,134
Revenue / Adjusted assets
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
Average production assets, $m
  7,119
  8,171
  9,301
  10,504
  11,779
  13,126
  14,542
  16,026
  17,579
  19,199
  20,888
  22,646
  24,475
  26,376
  28,352
  30,405
  32,539
  34,757
  37,063
  39,461
  41,956
  44,554
  47,260
  50,079
  53,018
  56,083
  59,282
  62,621
  66,109
  69,753
  73,563
Working capital, $m
  -115
  -366
  -417
  -471
  -528
  -588
  -652
  -718
  -788
  -860
  -936
  -1,015
  -1,097
  -1,182
  -1,270
  -1,362
  -1,458
  -1,557
  -1,661
  -1,768
  -1,880
  -1,996
  -2,117
  -2,244
  -2,375
  -2,513
  -2,656
  -2,806
  -2,962
  -3,125
  -3,296
Total debt, $m
  3,295
  4,547
  5,880
  7,301
  8,807
  10,396
  12,068
  13,820
  15,653
  17,566
  19,560
  21,636
  23,795
  26,039
  28,372
  30,796
  33,315
  35,933
  38,656
  41,487
  44,433
  47,500
  50,694
  54,022
  57,492
  61,111
  64,887
  68,830
  72,947
  77,250
  81,748
Total liabilities, $m
  8,395
  9,647
  10,980
  12,401
  13,907
  15,496
  17,168
  18,920
  20,753
  22,666
  24,660
  26,736
  28,895
  31,139
  33,472
  35,896
  38,415
  41,033
  43,756
  46,587
  49,533
  52,600
  55,794
  59,122
  62,592
  66,211
  69,987
  73,930
  78,047
  82,350
  86,848
Total equity, $m
  1,881
  1,920
  2,185
  2,468
  2,768
  3,084
  3,417
  3,766
  4,131
  4,512
  4,908
  5,322
  5,751
  6,198
  6,662
  7,145
  7,646
  8,167
  8,709
  9,273
  9,859
  10,470
  11,105
  11,768
  12,458
  13,179
  13,930
  14,715
  15,535
  16,391
  17,286
Total liabilities and equity, $m
  10,276
  11,567
  13,165
  14,869
  16,675
  18,580
  20,585
  22,686
  24,884
  27,178
  29,568
  32,058
  34,646
  37,337
  40,134
  43,041
  46,061
  49,200
  52,465
  55,860
  59,392
  63,070
  66,899
  70,890
  75,050
  79,390
  83,917
  88,645
  93,582
  98,741
  104,134
Debt-to-equity ratio
  1.752
  2.370
  2.690
  2.960
  3.180
  3.370
  3.530
  3.670
  3.790
  3.890
  3.990
  4.070
  4.140
  4.200
  4.260
  4.310
  4.360
  4.400
  4.440
  4.470
  4.510
  4.540
  4.560
  4.590
  4.610
  4.640
  4.660
  4.680
  4.700
  4.710
  4.730
Adjusted equity ratio
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166
  0.166

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -460
  -1,546
  -1,772
  -2,012
  -2,267
  -2,537
  -2,821
  -3,119
  -3,431
  -3,756
  -4,095
  -4,295
  -4,662
  -5,045
  -5,442
  -5,855
  -6,284
  -6,730
  -7,193
  -7,676
  -8,177
  -8,699
  -9,243
  -9,810
  -10,400
  -11,016
  -11,658
  -12,329
  -13,030
  -13,762
  -14,527
Depreciation, amort., depletion, $m
  504
  608
  671
  738
  809
  883
  962
  1,045
  1,131
  1,221
  1,315
  1,258
  1,360
  1,465
  1,575
  1,689
  1,808
  1,931
  2,059
  2,192
  2,331
  2,475
  2,626
  2,782
  2,945
  3,116
  3,293
  3,479
  3,673
  3,875
  4,087
Funds from operations, $m
  699
  -938
  -1,101
  -1,274
  -1,459
  -1,654
  -1,859
  -2,074
  -2,300
  -2,535
  -2,781
  -3,037
  -3,303
  -3,579
  -3,867
  -4,166
  -4,476
  -4,799
  -5,134
  -5,483
  -5,846
  -6,224
  -6,617
  -7,027
  -7,455
  -7,900
  -8,365
  -8,850
  -9,357
  -9,886
  -10,440
Change in working capital, $m
  33
  -47
  -51
  -54
  -57
  -60
  -63
  -67
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -99
  -103
  -107
  -112
  -116
  -121
  -126
  -132
  -137
  -143
  -150
  -156
  -163
  -171
Cash from operations, $m
  666
  -128
  -1,050
  -1,220
  -1,402
  -1,593
  -1,796
  -2,008
  -2,230
  -2,463
  -2,705
  -2,958
  -3,221
  -3,494
  -3,778
  -4,074
  -4,380
  -4,699
  -5,031
  -5,376
  -5,734
  -6,108
  -6,496
  -6,901
  -7,323
  -7,763
  -8,222
  -8,701
  -9,201
  -9,723
  -10,269
Maintenance CAPEX, $m
  0
  -395
  -454
  -517
  -584
  -654
  -729
  -808
  -890
  -977
  -1,067
  -1,160
  -1,258
  -1,360
  -1,465
  -1,575
  -1,689
  -1,808
  -1,931
  -2,059
  -2,192
  -2,331
  -2,475
  -2,626
  -2,782
  -2,945
  -3,116
  -3,293
  -3,479
  -3,673
  -3,875
New CAPEX, $m
  -663
  -1,053
  -1,129
  -1,203
  -1,276
  -1,346
  -1,416
  -1,484
  -1,553
  -1,621
  -1,689
  -1,758
  -1,829
  -1,901
  -1,976
  -2,053
  -2,134
  -2,218
  -2,306
  -2,398
  -2,495
  -2,598
  -2,705
  -2,819
  -2,939
  -3,065
  -3,199
  -3,339
  -3,488
  -3,645
  -3,810
Cash from investing activities, $m
  -1,380
  -1,448
  -1,583
  -1,720
  -1,860
  -2,000
  -2,145
  -2,292
  -2,443
  -2,598
  -2,756
  -2,918
  -3,087
  -3,261
  -3,441
  -3,628
  -3,823
  -4,026
  -4,237
  -4,457
  -4,687
  -4,929
  -5,180
  -5,445
  -5,721
  -6,010
  -6,315
  -6,632
  -6,967
  -7,318
  -7,685
Free cash flow, $m
  -714
  -1,576
  -2,633
  -2,940
  -3,261
  -3,594
  -3,941
  -4,300
  -4,673
  -5,060
  -5,461
  -5,876
  -6,308
  -6,755
  -7,219
  -7,702
  -8,203
  -8,725
  -9,268
  -9,833
  -10,422
  -11,036
  -11,677
  -12,346
  -13,044
  -13,774
  -14,536
  -15,334
  -16,168
  -17,040
  -17,954
Issuance/(repayment) of debt, $m
  226
  1,252
  1,333
  1,421
  1,506
  1,590
  1,672
  1,753
  1,833
  1,913
  1,994
  2,076
  2,159
  2,244
  2,333
  2,424
  2,519
  2,618
  2,722
  2,831
  2,946
  3,067
  3,194
  3,328
  3,470
  3,619
  3,776
  3,943
  4,118
  4,303
  4,498
Issuance/(repurchase) of shares, $m
  168
  363
  1,565
  1,803
  2,055
  2,321
  2,602
  2,896
  3,205
  3,527
  3,864
  4,214
  4,578
  4,957
  5,351
  5,760
  6,186
  6,628
  7,087
  7,565
  8,062
  8,580
  9,119
  9,680
  10,265
  10,875
  11,511
  12,176
  12,869
  13,594
  14,351
Cash from financing (excl. dividends), $m  
  893
  1,615
  2,898
  3,224
  3,561
  3,911
  4,274
  4,649
  5,038
  5,440
  5,858
  6,290
  6,737
  7,201
  7,684
  8,184
  8,705
  9,246
  9,809
  10,396
  11,008
  11,647
  12,313
  13,008
  13,735
  14,494
  15,287
  16,119
  16,987
  17,897
  18,849
Total cash flow (excl. dividends), $m
  179
  -324
  -1,300
  -1,520
  -1,755
  -2,005
  -2,269
  -2,548
  -2,840
  -3,147
  -3,467
  -3,801
  -4,149
  -4,510
  -4,887
  -5,278
  -5,684
  -6,107
  -6,546
  -7,002
  -7,476
  -7,969
  -8,483
  -9,018
  -9,574
  -10,155
  -10,760
  -11,391
  -12,050
  -12,738
  -13,456
Retained Cash Flow (-), $m
  405
  -244
  -265
  -283
  -300
  -316
  -333
  -349
  -365
  -381
  -397
  -413
  -430
  -447
  -464
  -482
  -501
  -521
  -542
  -564
  -586
  -610
  -636
  -662
  -691
  -720
  -752
  -785
  -820
  -856
  -895
Prev. year cash balance distribution, $m
 
  205
  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, %
 
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.18
  22.24
  23.35
  24.52
  25.74
  27.03
  28.38
  29.80
  31.29
  32.85
  34.50
  36.22
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
  88.4
  59.1
  39.4
  26.1
  17.3
  11.5
  7.6
  5.0
  3.3
  2.2
  1.4
  0.9
  0.6
  0.4
  0.3
  0.2
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

EnLink Midstream, LLC gathering, transmission, processing, fractionation, storage, stabilization, brine, and marketing services to producers of natural gas, natural gas liquids, crude oil, and condensate in the United States. Its midstream energy asset network includes approximately 11,000 miles of pipelines; 20 natural gas processing plants; 7 fractionators; barge and rail terminals; product storage facilities; brine disposal wells; and a crude oil trucking fleet. The company was founded in 2013 and is headquartered in Dallas, Texas. EnLink Midstream, LLC is a subsidiary of Devon Energy Corporation.

FINANCIAL RATIOS  of  EnLink Midstream (ENLC)

Valuation Ratios
P/E Ratio -6.8
Price to Sales 0.7
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 4.7
Price to Free Cash Flow 1035.3
Growth Rates
Sales Growth Rate -4.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 15.9%
Cap. Spend. - 3 Yr. Gr. Rate 22.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 175.2%
Total Debt to Equity 175.2%
Interest Coverage -6
Management Effectiveness
Return On Assets -3.3%
Ret/ On Assets - 3 Yr. Avg. -1%
Return On Total Capital -8.7%
Ret/ On T. Cap. - 3 Yr. Avg. -4%
Return On Equity -22.1%
Return On Equity - 3 Yr. Avg. -10.2%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 29.1%
Gross Margin - 3 Yr. Avg. 28.4%
EBITDA Margin -5.8%
EBITDA Margin - 3 Yr. Avg. -2.2%
Operating Margin -15.9%
Oper. Margin - 3 Yr. Avg. -11.6%
Pre-Tax Margin -20.8%
Pre-Tax Margin - 3 Yr. Avg. -14.2%
Net Profit Margin -10.8%
Net Profit Margin - 3 Yr. Avg. -5.1%
Effective Tax Rate -0.5%
Eff/ Tax Rate - 3 Yr. Avg. 7%
Payout Ratio -40.2%

ENLC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENLC stock intrinsic value calculation we used $4252 million for the last fiscal year's total revenue generated by EnLink Midstream. The default revenue input number comes from 2016 income statement of EnLink Midstream. 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 ENLC stock valuation model: a) initial revenue growth rate of 14.8% 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 8.8%, whose default value for ENLC is calculated based on our internal credit rating of EnLink Midstream, 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 EnLink Midstream.
    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 ENLC stock the variable cost ratio is equal to 129.3%.

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 ENLC 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 4.2% for EnLink Midstream.

Corporate tax rate of 27% is the nominal tax rate for EnLink Midstream. 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 ENLC 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 ENLC are equal to 167.4%.

Life of production assets of 18 years is the average useful life of capital assets used in EnLink Midstream 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 ENLC is equal to -7.5%. 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 - $1881 million for EnLink Midstream - 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 179.487 million for EnLink Midstream 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 EnLink Midstream at the current share price and the inputted number of shares is $3.1 billion.


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COMPANY NEWS

▶ Why EnLink Midstream Is Reaching New YTD Lows   [Jun-23-17 09:09AM  Market Realist]
▶ Why ONEOK Inc Could Be a Gold Mine for Income Investors   [Jun-21-17 10:00AM  Motley Fool]
▶ What Were Key MLP Ratings Updates Last Week?   [Jun-19-17 03:05PM  Market Realist]
▶ Analysts Ratings: ETE Has Most Buys, ENLC Has Most Sells   [Jun-01-17 09:06AM  Market Realist]
▶ ETEs, ENLCs Short Interests Are above the Industry Average   [May-31-17 10:36AM  Market Realist]
▶ EnLink Midstream to Participate in Investor Conferences   [May-16-17 08:04AM  PR Newswire]
▶ ETFs with exposure to EnLink Midstream LLC : May 8, 2017   [May-08-17 04:27PM  Capital Cube]
▶ EnLink Midstream reports 1Q loss   [May-03-17 05:02AM  Associated Press]
▶ How Analysts View EnLink Midstream before Its 1Q17 Earnings   [Apr-28-17 10:37AM  Market Realist]
▶ Short Interest: Which Midstream Stocks Could Be Bearish?   [Apr-27-17 04:35PM  Market Realist]
▶ Investors Should Watch These Midstream Stocks   [Apr-20-17 11:46AM  Market Realist]
▶ EnLink Midstream to Participate in Investor Conferences   [Apr-19-17 05:03PM  PR Newswire]
▶ Why These Midstream Stocks Could Be Bearish   [02:35PM  Market Realist]
▶ Civitas Capital to relocate its Dallas headquarters to city's Arts District   [Apr-07-17 02:05PM  American City Business Journals]
▶ Why These Midstream Stocks Could Mean Trouble   [Apr-06-17 09:06AM  Market Realist]
▶ How Short Interest Could Impact Midstream Stocks   [Mar-27-17 03:50PM  Market Realist]
▶ Why These Midstream Stocks Could Be Bearish   [Mar-21-17 04:48PM  Market Realist]
▶ These Midstream Stocks Have the Highest Short Interest   [Mar-14-17 01:05PM  Market Realist]
▶ These Midstream Stocks Lead in Short Interest   [Mar-07-17 02:05PM  Market Realist]
▶ Do You Own These Bearish Midstream Stocks?   [Feb-28-17 12:35PM  Market Realist]
▶ EnLink Midstream to Participate in Investor Conferences   [Feb-23-17 05:03PM  PR Newswire]
Stock chart of ENLC Financial statements of ENLC Annual reports of ENLC
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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