Intrinsic value of EnLink Midstream Partners - ENLK

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$15.48

  Intrinsic Value

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  Value-price divergence*

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$15.48

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

We calculate the intrinsic value of ENLK 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 5.4

 

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
  4,264
  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
 
  6,300
  7,165
  8,087
  9,064
  10,095
  11,179
  12,316
  13,505
  14,746
  16,040
  17,344
  18,745
  20,201
  21,714
  23,287
  24,921
  26,619
  28,385
  30,222
  32,133
  34,123
  36,195
  38,354
  40,605
  42,953
  45,402
  47,960
  50,631
  53,422
  56,340
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
  4,617
  6,300
  7,165
  8,087
  9,064
  10,095
  11,179
  12,316
  13,505
  14,746
  16,040
  17,344
  18,745
  20,201
  21,714
  23,287
  24,921
  26,619
  28,385
  30,222
  32,133
  34,123
  36,195
  38,354
  40,605
  42,953
  45,402
  47,960
  50,631
  53,422
  56,340
Operating income, $m
  -364
  -1,419
  -1,609
  -1,812
  -2,027
  -2,254
  -2,493
  -2,743
  -3,004
  -3,277
  -3,562
  -3,816
  -4,124
  -4,444
  -4,777
  -5,123
  -5,483
  -5,857
  -6,245
  -6,649
  -7,070
  -7,508
  -7,963
  -8,438
  -8,934
  -9,450
  -9,989
  -10,552
  -11,140
  -11,754
  -12,396
EBITDA, $m
  140
  -850
  -967
  -1,092
  -1,225
  -1,365
  -1,512
  -1,667
  -1,828
  -1,996
  -2,172
  -2,355
  -2,545
  -2,743
  -2,948
  -3,162
  -3,384
  -3,614
  -3,854
  -4,103
  -4,363
  -4,633
  -4,914
  -5,208
  -5,513
  -5,832
  -6,165
  -6,512
  -6,875
  -7,253
  -7,650
Interest expense (income), $m
  133
  137
  168
  201
  236
  274
  313
  354
  398
  443
  491
  540
  591
  645
  700
  758
  818
  881
  945
  1,013
  1,083
  1,156
  1,232
  1,311
  1,394
  1,480
  1,569
  1,663
  1,760
  1,862
  1,969
Earnings before tax, $m
  -572
  -1,556
  -1,777
  -2,013
  -2,263
  -2,527
  -2,805
  -3,097
  -3,402
  -3,720
  -4,052
  -4,356
  -4,715
  -5,089
  -5,478
  -5,882
  -6,301
  -6,737
  -7,191
  -7,662
  -8,153
  -8,664
  -9,195
  -9,750
  -10,327
  -10,930
  -11,558
  -12,215
  -12,900
  -13,616
  -14,365
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
  -565
  -1,556
  -1,777
  -2,013
  -2,263
  -2,527
  -2,805
  -3,097
  -3,402
  -3,720
  -4,052
  -4,356
  -4,715
  -5,089
  -5,478
  -5,882
  -6,301
  -6,737
  -7,191
  -7,662
  -8,153
  -8,664
  -9,195
  -9,750
  -10,327
  -10,930
  -11,558
  -12,215
  -12,900
  -13,616
  -14,365

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  12
  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
  9,153
  10,497
  11,948
  13,494
  15,133
  16,862
  18,681
  20,588
  22,583
  24,665
  26,834
  29,093
  31,442
  33,885
  36,423
  39,061
  41,802
  44,651
  47,613
  50,694
  53,900
  57,237
  60,713
  64,335
  68,110
  72,048
  76,157
  80,447
  84,928
  89,610
  94,504
Adjusted assets (=assets-cash), $m
  9,141
  10,497
  11,948
  13,494
  15,133
  16,862
  18,681
  20,588
  22,583
  24,665
  26,834
  29,093
  31,442
  33,885
  36,423
  39,061
  41,802
  44,651
  47,613
  50,694
  53,900
  57,237
  60,713
  64,335
  68,110
  72,048
  76,157
  80,447
  84,928
  89,610
  94,504
Revenue / Adjusted assets
  0.466
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
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
  -116
  -146
  -167
  -188
  -211
  -235
  -261
  -287
  -315
  -344
  -374
  -406
  -439
  -473
  -508
  -545
  -583
  -623
  -664
  -707
  -752
  -798
  -847
  -897
  -950
  -1,005
  -1,062
  -1,122
  -1,185
  -1,250
  -1,318
Total debt, $m
  3,268
  4,001
  4,787
  5,625
  6,513
  7,450
  8,436
  9,470
  10,551
  11,679
  12,855
  14,079
  15,353
  16,676
  18,052
  19,482
  20,968
  22,512
  24,117
  25,787
  27,525
  29,334
  31,217
  33,180
  35,227
  37,361
  39,588
  41,913
  44,342
  46,880
  49,532
Total liabilities, $m
  4,957
  5,690
  6,476
  7,314
  8,202
  9,139
  10,125
  11,159
  12,240
  13,368
  14,544
  15,768
  17,042
  18,365
  19,741
  21,171
  22,657
  24,201
  25,806
  27,476
  29,214
  31,023
  32,906
  34,869
  36,916
  39,050
  41,277
  43,602
  46,031
  48,569
  51,221
Total equity, $m
  4,196
  4,808
  5,472
  6,180
  6,931
  7,723
  8,556
  9,429
  10,343
  11,296
  12,290
  13,325
  14,401
  15,519
  16,682
  17,890
  19,145
  20,450
  21,807
  23,218
  24,686
  26,215
  27,807
  29,465
  31,194
  32,998
  34,880
  36,845
  38,897
  41,041
  43,283
Total liabilities and equity, $m
  9,153
  10,498
  11,948
  13,494
  15,133
  16,862
  18,681
  20,588
  22,583
  24,664
  26,834
  29,093
  31,443
  33,884
  36,423
  39,061
  41,802
  44,651
  47,613
  50,694
  53,900
  57,238
  60,713
  64,334
  68,110
  72,048
  76,157
  80,447
  84,928
  89,610
  94,504
Debt-to-equity ratio
  0.779
  0.830
  0.870
  0.910
  0.940
  0.960
  0.990
  1.000
  1.020
  1.030
  1.050
  1.060
  1.070
  1.070
  1.080
  1.090
  1.100
  1.100
  1.110
  1.110
  1.110
  1.120
  1.120
  1.130
  1.130
  1.130
  1.130
  1.140
  1.140
  1.140
  1.140
Adjusted equity ratio
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -565
  -1,556
  -1,777
  -2,013
  -2,263
  -2,527
  -2,805
  -3,097
  -3,402
  -3,720
  -4,052
  -4,356
  -4,715
  -5,089
  -5,478
  -5,882
  -6,301
  -6,737
  -7,191
  -7,662
  -8,153
  -8,664
  -9,195
  -9,750
  -10,327
  -10,930
  -11,558
  -12,215
  -12,900
  -13,616
  -14,365
Depreciation, amort., depletion, $m
  504
  569
  642
  720
  802
  889
  980
  1,076
  1,176
  1,281
  1,390
  1,461
  1,579
  1,702
  1,829
  1,962
  2,099
  2,242
  2,391
  2,546
  2,707
  2,874
  3,049
  3,231
  3,420
  3,618
  3,825
  4,040
  4,265
  4,500
  4,746
Funds from operations, $m
  688
  -987
  -1,135
  -1,293
  -1,461
  -1,638
  -1,825
  -2,021
  -2,226
  -2,440
  -2,663
  -2,895
  -3,136
  -3,388
  -3,649
  -3,920
  -4,202
  -4,495
  -4,800
  -5,116
  -5,446
  -5,789
  -6,146
  -6,519
  -6,907
  -7,311
  -7,734
  -8,175
  -8,635
  -9,116
  -9,619
Change in working capital, $m
  25
  -19
  -20
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -32
  -33
  -34
  -35
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -48
  -51
  -53
  -55
  -57
  -60
  -63
  -65
  -68
Cash from operations, $m
  663
  -206
  -1,115
  -1,272
  -1,438
  -1,614
  -1,800
  -1,994
  -2,198
  -2,411
  -2,632
  -2,863
  -3,104
  -3,354
  -3,613
  -3,883
  -4,164
  -4,455
  -4,758
  -5,073
  -5,401
  -5,743
  -6,098
  -6,468
  -6,854
  -7,257
  -7,676
  -8,115
  -8,572
  -9,051
  -9,550
Maintenance CAPEX, $m
  0
  -459
  -527
  -600
  -678
  -760
  -847
  -938
  -1,034
  -1,134
  -1,239
  -1,348
  -1,461
  -1,579
  -1,702
  -1,829
  -1,962
  -2,099
  -2,242
  -2,391
  -2,546
  -2,707
  -2,874
  -3,049
  -3,231
  -3,420
  -3,618
  -3,825
  -4,040
  -4,265
  -4,500
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
  -1,358
  -1,512
  -1,656
  -1,803
  -1,954
  -2,106
  -2,263
  -2,422
  -2,587
  -2,755
  -2,928
  -3,106
  -3,290
  -3,480
  -3,678
  -3,882
  -4,096
  -4,317
  -4,548
  -4,789
  -5,041
  -5,305
  -5,579
  -5,868
  -6,170
  -6,485
  -6,817
  -7,164
  -7,528
  -7,910
  -8,310
Free cash flow, $m
  -695
  -1,718
  -2,771
  -3,075
  -3,392
  -3,721
  -4,062
  -4,417
  -4,784
  -5,165
  -5,560
  -5,969
  -6,393
  -6,834
  -7,291
  -7,766
  -8,259
  -8,772
  -9,306
  -9,863
  -10,443
  -11,047
  -11,678
  -12,336
  -13,024
  -13,742
  -14,493
  -15,279
  -16,100
  -16,960
  -17,860
Issuance/(repayment) of debt, $m
  199
  733
  786
  838
  888
  937
  986
  1,034
  1,081
  1,128
  1,176
  1,224
  1,273
  1,324
  1,376
  1,430
  1,486
  1,544
  1,606
  1,670
  1,738
  1,809
  1,884
  1,963
  2,046
  2,134
  2,227
  2,325
  2,429
  2,538
  2,653
Issuance/(repurchase) of shares, $m
  892
  1,597
  2,650
  2,945
  3,254
  3,575
  3,910
  4,257
  4,617
  4,990
  5,378
  5,779
  6,196
  6,629
  7,078
  7,544
  8,029
  8,533
  9,058
  9,604
  10,173
  10,767
  11,386
  12,032
  12,707
  13,412
  14,148
  14,918
  15,724
  16,567
  17,449
Cash from financing (excl. dividends), $m  
  1,280
  2,330
  3,436
  3,783
  4,142
  4,512
  4,896
  5,291
  5,698
  6,118
  6,554
  7,003
  7,469
  7,953
  8,454
  8,974
  9,515
  10,077
  10,664
  11,274
  11,911
  12,576
  13,270
  13,995
  14,753
  15,546
  16,375
  17,243
  18,153
  19,105
  20,102
Total cash flow (excl. dividends), $m
  585
  -985
  -1,985
  -2,237
  -2,503
  -2,783
  -3,077
  -3,383
  -3,703
  -4,037
  -4,384
  -4,745
  -5,120
  -5,510
  -5,915
  -6,336
  -6,773
  -7,228
  -7,701
  -8,193
  -8,705
  -9,238
  -9,794
  -10,373
  -10,978
  -11,608
  -12,266
  -12,954
  -13,672
  -14,423
  -15,208
Retained Cash Flow (-), $m
  223
  -624
  -664
  -708
  -751
  -792
  -833
  -873
  -913
  -953
  -994
  -1,034
  -1,076
  -1,119
  -1,163
  -1,208
  -1,255
  -1,305
  -1,357
  -1,411
  -1,468
  -1,528
  -1,592
  -1,659
  -1,729
  -1,804
  -1,882
  -1,965
  -2,052
  -2,144
  -2,242
Prev. year cash balance distribution, $m
 
  12
  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, %
 
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
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
  53.9
  38.0
  26.9
  19.2
  13.8
  9.9
  7.2
  5.2
  3.8
  2.8
  2.0
  1.5
  1.1
  0.8
  0.6
  0.5
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

EnLink Midstream Partners, LP, through its subsidiary, EnLink Midstream Operating, LP, provides midstream energy services. The company provides gathering, transmission, processing, fractionation, storage, condensate stabilization, brine, and marketing services to producers of natural gas, natural gas liquids (NGL), crude oil, and condensate. It connects the wells of natural gas producers to its gathering systems; processes natural gas for the removal of NGLs; fractionates NGLs into purity products; markets the purity products; and transports natural gas to various markets. The company also purchases natural gas from natural gas producers and other supply sources, and sells that natural gas to utilities, industrial consumers, other marketers, and pipelines. It operates approximately 11,000 miles of pipelines, 20 natural gas processing plants, 7 fractionators, barge and rail terminals, product storage facilities, purchasing and marketing capabilities, and brine disposal wells, as well as a crude oil trucking fleet of approximately 150 trucks. EnLink Midstream GP, LLC serves as the general partner of the company. The company was formerly known as Crosstex Energy L.P. and changed its name to EnLink Midstream Partners, LP in March 2014. EnLink Midstream Partners, LP was founded in 1992 and is headquartered in Dallas, Texas.

FINANCIAL RATIOS  of  EnLink Midstream Partners (ENLK)

Valuation Ratios
P/E Ratio -9.4
Price to Sales 1.2
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 8
Price to Free Cash Flow 0
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 0.2
LT Debt to Equity 77.9%
Total Debt to Equity 77.9%
Interest Coverage -3
Management Effectiveness
Return On Assets -5%
Ret/ On Assets - 3 Yr. Avg. -4.5%
Return On Total Capital -7.6%
Ret/ On T. Cap. - 3 Yr. Avg. -6.3%
Return On Equity -13.1%
Return On Equity - 3 Yr. Avg. -10.5%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 1.5%
EBITDA Margin - 3 Yr. Avg. 0.3%
Operating Margin -8.6%
Oper. Margin - 3 Yr. Avg. -9.2%
Pre-Tax Margin -13.5%
Pre-Tax Margin - 3 Yr. Avg. -11.7%
Net Profit Margin -13.3%
Net Profit Margin - 3 Yr. Avg. -11.8%
Effective Tax Rate -0.2%
Eff/ Tax Rate - 3 Yr. Avg. 2.2%
Payout Ratio -102.5%

ENLK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENLK stock intrinsic value calculation we used $4252 million for the last fiscal year's total revenue generated by EnLink Midstream Partners. The default revenue input number comes from 2016 income statement of EnLink 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 ENLK 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 7.5%, whose default value for ENLK is calculated based on our internal credit rating of EnLink 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 EnLink 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 ENLK stock the variable cost ratio is equal to 129.2%.

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 ENLK 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 Partners.

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

Life of production assets of 15.5 years is the average useful life of capital assets used in EnLink 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 ENLK is equal to -3%. 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 - $4196 million for EnLink 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 347.691 million for EnLink 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 EnLink Midstream Partners at the current share price and the inputted number of shares is $5.4 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]
▶ 5 MLPs Likely to do Best When Crude Rebounds   [May-08-17 08:38PM  Barrons.com]
▶ 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]
▶ 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]
▶ 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]
▶ EnLink Midstream Files 2016 Annual Reports   [Feb-15-17 12:15PM  PR Newswire]
Stock chart of ENLK Financial statements of ENLK Annual reports of ENLK
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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