Intrinsic value of Spectra Energy Partners - SEP

Previous Close

$42.83

  Intrinsic Value

$6.97

stock screener

  Rating & Target

str. sell

-84%

Previous close

$42.83

 
Intrinsic value

$6.97

 
Up/down potential

-84%

 
Rating

str. sell

We calculate the intrinsic value of SEP 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 13.6

 

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, %
  3.18
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.35
  7.12
  6.91
  6.72
  6.54
  6.39
  6.25
  6.13
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.44
  5.39
  5.35
Revenue, $m
  2,533
  2,850
  3,184
  3,537
  3,907
  4,295
  4,700
  5,122
  5,562
  6,020
  6,496
  6,990
  7,504
  8,039
  8,594
  9,171
  9,771
  10,396
  11,045
  11,722
  12,427
  13,161
  13,928
  14,727
  15,561
  16,432
  17,342
  18,293
  19,288
  20,328
  21,416
Variable operating expenses, $m
 
  1,333
  1,452
  1,577
  1,708
  1,845
  1,989
  2,138
  2,294
  2,456
  2,625
  2,477
  2,659
  2,848
  3,045
  3,250
  3,462
  3,683
  3,914
  4,153
  4,403
  4,663
  4,935
  5,218
  5,514
  5,822
  6,145
  6,482
  6,834
  7,203
  7,588
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
  1,305
  1,333
  1,452
  1,577
  1,708
  1,845
  1,989
  2,138
  2,294
  2,456
  2,625
  2,477
  2,659
  2,848
  3,045
  3,250
  3,462
  3,683
  3,914
  4,153
  4,403
  4,663
  4,935
  5,218
  5,514
  5,822
  6,145
  6,482
  6,834
  7,203
  7,588
Operating income, $m
  1,228
  1,517
  1,733
  1,960
  2,199
  2,450
  2,711
  2,984
  3,268
  3,563
  3,871
  4,514
  4,845
  5,190
  5,549
  5,921
  6,309
  6,712
  7,132
  7,569
  8,024
  8,498
  8,993
  9,509
  10,047
  10,610
  11,197
  11,812
  12,454
  13,125
  13,828
EBITDA, $m
  1,548
  2,401
  2,683
  2,980
  3,292
  3,619
  3,960
  4,316
  4,687
  5,072
  5,473
  5,890
  6,323
  6,773
  7,241
  7,728
  8,233
  8,759
  9,307
  9,877
  10,471
  11,090
  11,735
  12,409
  13,112
  13,846
  14,613
  15,414
  16,252
  17,128
  18,045
Interest expense (income), $m
  209
  245
  287
  330
  376
  424
  474
  526
  581
  638
  697
  758
  822
  889
  958
  1,030
  1,104
  1,182
  1,263
  1,347
  1,434
  1,525
  1,620
  1,719
  1,823
  1,931
  2,043
  2,161
  2,284
  2,413
  2,547
Earnings before tax, $m
  1,257
  1,272
  1,446
  1,630
  1,824
  2,026
  2,238
  2,458
  2,687
  2,926
  3,174
  3,755
  4,023
  4,302
  4,591
  4,892
  5,205
  5,530
  5,869
  6,222
  6,590
  6,973
  7,372
  7,789
  8,225
  8,679
  9,154
  9,651
  10,170
  10,713
  11,281
Tax expense, $m
  18
  343
  390
  440
  492
  547
  604
  664
  726
  790
  857
  1,014
  1,086
  1,161
  1,240
  1,321
  1,405
  1,493
  1,585
  1,680
  1,779
  1,883
  1,991
  2,103
  2,221
  2,343
  2,472
  2,606
  2,746
  2,892
  3,046
Net income, $m
  1,161
  928
  1,056
  1,190
  1,331
  1,479
  1,633
  1,794
  1,962
  2,136
  2,317
  2,741
  2,937
  3,140
  3,351
  3,571
  3,799
  4,037
  4,284
  4,542
  4,810
  5,090
  5,382
  5,686
  6,004
  6,336
  6,683
  7,045
  7,424
  7,820
  8,235

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  216
  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
  21,606
  24,149
  26,987
  29,976
  33,113
  36,399
  39,830
  43,410
  47,137
  51,016
  55,049
  59,241
  63,597
  68,124
  72,829
  77,720
  82,807
  88,098
  93,604
  99,338
  105,312
  111,538
  118,030
  124,803
  131,873
  139,255
  146,968
  155,028
  163,456
  172,270
  181,492
Adjusted assets (=assets-cash), $m
  21,390
  24,149
  26,987
  29,976
  33,113
  36,399
  39,830
  43,410
  47,137
  51,016
  55,049
  59,241
  63,597
  68,124
  72,829
  77,720
  82,807
  88,098
  93,604
  99,338
  105,312
  111,538
  118,030
  124,803
  131,873
  139,255
  146,968
  155,028
  163,456
  172,270
  181,492
Revenue / Adjusted assets
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
  0.118
Average production assets, $m
  14,965
  16,836
  18,814
  20,897
  23,085
  25,375
  27,768
  30,263
  32,861
  35,565
  38,377
  41,300
  44,337
  47,492
  50,773
  54,182
  57,728
  61,417
  65,256
  69,253
  73,417
  77,758
  82,284
  87,006
  91,934
  97,081
  102,458
  108,077
  113,952
  120,097
  126,526
Working capital, $m
  -1,119
  -388
  -433
  -481
  -531
  -584
  -639
  -697
  -756
  -819
  -883
  -951
  -1,021
  -1,093
  -1,169
  -1,247
  -1,329
  -1,414
  -1,502
  -1,594
  -1,690
  -1,790
  -1,894
  -2,003
  -2,116
  -2,235
  -2,359
  -2,488
  -2,623
  -2,765
  -2,913
Total debt, $m
  7,213
  8,193
  9,430
  10,733
  12,101
  13,534
  15,030
  16,591
  18,216
  19,907
  21,665
  23,493
  25,392
  27,366
  29,418
  31,550
  33,768
  36,075
  38,476
  40,976
  43,580
  46,294
  49,125
  52,078
  55,161
  58,379
  61,742
  65,256
  68,931
  72,774
  76,795
Total liabilities, $m
  9,549
  10,529
  11,766
  13,069
  14,437
  15,870
  17,366
  18,927
  20,552
  22,243
  24,001
  25,829
  27,728
  29,702
  31,754
  33,886
  36,104
  38,411
  40,812
  43,312
  45,916
  48,630
  51,461
  54,414
  57,497
  60,715
  64,078
  67,592
  71,267
  75,110
  79,131
Total equity, $m
  12,057
  13,620
  15,221
  16,906
  18,676
  20,529
  22,464
  24,483
  26,585
  28,773
  31,048
  33,412
  35,869
  38,422
  41,076
  43,834
  46,703
  49,687
  52,793
  56,027
  59,396
  62,907
  66,569
  70,389
  74,376
  78,540
  82,890
  87,436
  92,189
  97,160
  102,362
Total liabilities and equity, $m
  21,606
  24,149
  26,987
  29,975
  33,113
  36,399
  39,830
  43,410
  47,137
  51,016
  55,049
  59,241
  63,597
  68,124
  72,830
  77,720
  82,807
  88,098
  93,605
  99,339
  105,312
  111,537
  118,030
  124,803
  131,873
  139,255
  146,968
  155,028
  163,456
  172,270
  181,493
Debt-to-equity ratio
  0.598
  0.600
  0.620
  0.630
  0.650
  0.660
  0.670
  0.680
  0.690
  0.690
  0.700
  0.700
  0.710
  0.710
  0.720
  0.720
  0.720
  0.730
  0.730
  0.730
  0.730
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.750
  0.750
  0.750
  0.750
Adjusted equity ratio
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,161
  928
  1,056
  1,190
  1,331
  1,479
  1,633
  1,794
  1,962
  2,136
  2,317
  2,741
  2,937
  3,140
  3,351
  3,571
  3,799
  4,037
  4,284
  4,542
  4,810
  5,090
  5,382
  5,686
  6,004
  6,336
  6,683
  7,045
  7,424
  7,820
  8,235
Depreciation, amort., depletion, $m
  320
  885
  951
  1,020
  1,093
  1,169
  1,249
  1,332
  1,419
  1,509
  1,603
  1,377
  1,478
  1,583
  1,692
  1,806
  1,924
  2,047
  2,175
  2,308
  2,447
  2,592
  2,743
  2,900
  3,064
  3,236
  3,415
  3,603
  3,798
  4,003
  4,218
Funds from operations, $m
  1,378
  1,813
  2,006
  2,210
  2,424
  2,648
  2,882
  3,126
  3,381
  3,645
  3,920
  4,118
  4,415
  4,723
  5,044
  5,377
  5,724
  6,084
  6,460
  6,850
  7,258
  7,682
  8,125
  8,586
  9,068
  9,572
  10,098
  10,648
  11,222
  11,823
  12,452
Change in working capital, $m
  -84
  -43
  -46
  -48
  -50
  -53
  -55
  -57
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -78
  -82
  -85
  -88
  -92
  -96
  -100
  -104
  -109
  -113
  -118
  -124
  -129
  -135
  -141
  -148
Cash from operations, $m
  1,462
  1,856
  2,052
  2,258
  2,475
  2,701
  2,937
  3,184
  3,440
  3,707
  3,984
  4,185
  4,485
  4,796
  5,119
  5,456
  5,805
  6,169
  6,548
  6,942
  7,353
  7,782
  8,229
  8,695
  9,182
  9,690
  10,222
  10,777
  11,358
  11,965
  12,600
Maintenance CAPEX, $m
  0
  -499
  -561
  -627
  -697
  -769
  -846
  -926
  -1,009
  -1,095
  -1,186
  -1,279
  -1,377
  -1,478
  -1,583
  -1,692
  -1,806
  -1,924
  -2,047
  -2,175
  -2,308
  -2,447
  -2,592
  -2,743
  -2,900
  -3,064
  -3,236
  -3,415
  -3,603
  -3,798
  -4,003
New CAPEX, $m
  -2,414
  -1,871
  -1,978
  -2,084
  -2,187
  -2,290
  -2,393
  -2,495
  -2,599
  -2,704
  -2,812
  -2,922
  -3,037
  -3,156
  -3,280
  -3,410
  -3,546
  -3,689
  -3,839
  -3,997
  -4,164
  -4,340
  -4,526
  -4,722
  -4,929
  -5,147
  -5,377
  -5,619
  -5,875
  -6,145
  -6,429
Cash from investing activities, $m
  -2,754
  -2,370
  -2,539
  -2,711
  -2,884
  -3,059
  -3,239
  -3,421
  -3,608
  -3,799
  -3,998
  -4,201
  -4,414
  -4,634
  -4,863
  -5,102
  -5,352
  -5,613
  -5,886
  -6,172
  -6,472
  -6,787
  -7,118
  -7,465
  -7,829
  -8,211
  -8,613
  -9,034
  -9,478
  -9,943
  -10,432
Free cash flow, $m
  -1,292
  -514
  -488
  -453
  -409
  -359
  -301
  -237
  -167
  -92
  -13
  -16
  71
  162
  256
  353
  453
  556
  662
  770
  881
  994
  1,111
  1,230
  1,353
  1,479
  1,609
  1,742
  1,880
  2,022
  2,168
Issuance/(repayment) of debt, $m
  618
  1,196
  1,237
  1,303
  1,368
  1,432
  1,496
  1,560
  1,625
  1,691
  1,758
  1,828
  1,899
  1,974
  2,051
  2,132
  2,218
  2,307
  2,401
  2,500
  2,604
  2,714
  2,831
  2,953
  3,082
  3,219
  3,363
  3,514
  3,674
  3,843
  4,021
Issuance/(repurchase) of shares, $m
  1,080
  635
  545
  496
  438
  374
  302
  224
  141
  52
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,401
  1,831
  1,782
  1,799
  1,806
  1,806
  1,798
  1,784
  1,766
  1,743
  1,758
  1,828
  1,899
  1,974
  2,051
  2,132
  2,218
  2,307
  2,401
  2,500
  2,604
  2,714
  2,831
  2,953
  3,082
  3,219
  3,363
  3,514
  3,674
  3,843
  4,021
Total cash flow (excl. dividends), $m
  1,109
  1,317
  1,294
  1,346
  1,397
  1,447
  1,498
  1,548
  1,599
  1,650
  1,746
  1,811
  1,970
  2,136
  2,308
  2,486
  2,671
  2,863
  3,063
  3,270
  3,485
  3,709
  3,941
  4,184
  4,435
  4,698
  4,971
  5,257
  5,554
  5,865
  6,189
Retained Cash Flow (-), $m
  -1,244
  -1,563
  -1,600
  -1,686
  -1,770
  -1,853
  -1,936
  -2,019
  -2,102
  -2,188
  -2,275
  -2,364
  -2,457
  -2,553
  -2,654
  -2,759
  -2,869
  -2,984
  -3,106
  -3,234
  -3,369
  -3,511
  -3,662
  -3,820
  -3,987
  -4,164
  -4,350
  -4,546
  -4,753
  -4,971
  -5,201
Prev. year cash balance 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
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
 
  -246
  -306
  -340
  -373
  -405
  -438
  -471
  -504
  -537
  -529
  -553
  -487
  -417
  -346
  -273
  -198
  -121
  -43
  36
  116
  197
  280
  363
  448
  534
  622
  710
  801
  893
  988
Discount rate, %
 
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
 
  -230
  -267
  -273
  -275
  -273
  -266
  -256
  -242
  -227
  -194
  -174
  -130
  -93
  -64
  -41
  -24
  -12
  -3
  2
  5
  6
  6
  6
  5
  4
  3
  2
  1
  1
  1
Current shareholders' claim on cash, %
  100
  95.5
  92.2
  89.7
  87.6
  86.1
  85.0
  84.2
  83.8
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7
  83.7

Spectra Energy Partners, L.P. through its subsidiaries and equity affiliates, is engaged in the transmission, storage and gathering of natural gas, the transportation and storage of crude oil, and the transportation of natural gas liquids. Its segments include U.S. Transmission, Liquids and Other. The U.S. Transmission business provides transmission, storage, and gathering of natural gas for customers in various regions of the northeastern and southeastern United States. The Liquids business provides transportation and storage of crude oil for customers in the central United States and Canada. As of December 31, 2016, it had over 15,000 miles of transmission and transportation pipelines, and the storage of natural gas in underground facilities with aggregate working gas storage capacity of approximately 170 billion cubic feet in the United States and Canada. It owns and operates natural gas transmission, gathering and storage assets, and crude oil transportation and storage assets.

FINANCIAL RATIOS  of  Spectra Energy Partners (SEP)

Valuation Ratios
P/E Ratio 11.4
Price to Sales 5.2
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 9
Price to Free Cash Flow -13.9
Growth Rates
Sales Growth Rate 3.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 28.2%
Cap. Spend. - 3 Yr. Gr. Rate 18.8%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 51.6%
Total Debt to Equity 59.8%
Interest Coverage 7
Management Effectiveness
Return On Assets 6.8%
Ret/ On Assets - 3 Yr. Avg. 7.2%
Return On Total Capital 6.3%
Ret/ On T. Cap. - 3 Yr. Avg. 6.5%
Return On Equity 10.2%
Return On Equity - 3 Yr. Avg. 10.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 67.5%
Gross Margin - 3 Yr. Avg. 68.9%
EBITDA Margin 70.5%
EBITDA Margin - 3 Yr. Avg. 71.3%
Operating Margin 48.5%
Oper. Margin - 3 Yr. Avg. 50.1%
Pre-Tax Margin 49.6%
Pre-Tax Margin - 3 Yr. Avg. 49.5%
Net Profit Margin 45.8%
Net Profit Margin - 3 Yr. Avg. 46.7%
Effective Tax Rate 1.4%
Eff/ Tax Rate - 3 Yr. Avg. 1.9%
Payout Ratio 91.4%

SEP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SEP stock intrinsic value calculation we used $2533 million for the last fiscal year's total revenue generated by Spectra Energy Partners. The default revenue input number comes from 2016 income statement of Spectra Energy 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 SEP stock valuation model: a) initial revenue growth rate of 12.5% 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 6.8%, whose default value for SEP is calculated based on our internal credit rating of Spectra Energy 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 Spectra Energy 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 SEP stock the variable cost ratio is equal to 48.2%.

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 SEP 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 Spectra Energy Partners.

Corporate tax rate of 27% is the nominal tax rate for Spectra Energy 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 SEP 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 SEP are equal to 590.8%.

Life of production assets of 56.9 years is the average useful life of capital assets used in Spectra Energy 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 SEP is equal to -13.6%. 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 - $12057 million for Spectra Energy 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 316.601 million for Spectra Energy 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 Spectra Energy Partners at the current share price and the inputted number of shares is $13.6 billion.

RELATED COMPANIES Price Int.Val. Rating
WMB Williams 29.33 1.40  str.sell
WES Western Gas Pa 49.20 5.51  str.sell
TCP TC PipeLines 52.61 3.95  str.sell
ENB Enbridge 39.31 308.90  str.buy
KMI Kinder Morgan 18.42 6.07  str.sell
SXE Southcross Ene 2.00 1.80  hold

COMPANY NEWS

▶ What is Behind Spectra Energy Partners LPs (SEP) Superior ROE?   [Sep-19-17 07:57PM  Simply Wall St.]
▶ Institutional Activity in Spectra Energy Partners in 2Q17   [Aug-30-17 11:09AM  Market Realist]
▶ Sabal Trail Transmission Project Placed In-Service   [Jul-05-17 11:00AM  PR Newswire]
▶ Meet the top 5 largest employers in the Uptown and Galleria area   [03:00AM  American City Business Journals]
▶ Spectra Energy Looks to Recover from Its 52-Week Lows   [Jun-23-17 09:09AM  Market Realist]
▶ Oil stocks after OPEC keeps production steady   [May-30-17 09:42AM  CNBC Videos]
▶ Midstream Stocks Returns and Implied Volatilities   [Apr-27-17 03:06PM  Market Realist]
▶ Cramer: The next big Trump stock is a Canadian company   [Apr-26-17 06:53PM  CNBC Videos]
▶ Spectra Energy Partners May Be Ending Downtrend   [Apr-07-17 03:57PM  TheStreet.com]
▶ Enbridge to cut 6 percent of its workforce   [Mar-22-17 12:58PM  at bizjournals.com]
▶ Enbridge to cut 6 percent of its workforce   [12:58PM  American City Business Journals]
▶ Stock Market News for March 14, 2017   [Mar-14-17 10:10AM  Zacks]
▶ Westcoast Energy and Union Gas Declare Dividends   [Feb-23-17 06:16PM  CNW Group]
▶ Why Enbridge Energy Partners Stock Got Hammered in January   [Feb-10-17 10:04AM  at Motley Fool]
▶ Hate Checking Your Portfolio? Try These 3 Stocks   [Feb-07-17 06:48PM  at Motley Fool]
Financial statements of SEP
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.