Intrinsic value of Spectra Energy Partners - SEP

Previous Close

$43.40

  Intrinsic Value

$6.68

stock screener

  Rating & Target

str. sell

-85%

Previous close

$43.40

 
Intrinsic value

$6.68

 
Up/down potential

-85%

 
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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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
  10.40
  9.86
  9.37
  8.94
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.53
  6.37
  6.24
  6.11
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
Revenue, $m
  2,533
  2,796
  3,072
  3,360
  3,660
  3,973
  4,298
  4,637
  4,988
  5,354
  5,733
  6,128
  6,538
  6,965
  7,409
  7,871
  8,352
  8,853
  9,375
  9,920
  10,488
  11,082
  11,701
  12,349
  13,025
  13,732
  14,472
  15,246
  16,057
  16,905
  17,793
Variable operating expenses, $m
 
  1,314
  1,412
  1,514
  1,620
  1,731
  1,846
  1,966
  2,091
  2,220
  2,355
  2,171
  2,317
  2,468
  2,625
  2,789
  2,959
  3,137
  3,322
  3,515
  3,716
  3,927
  4,146
  4,375
  4,615
  4,866
  5,128
  5,402
  5,689
  5,990
  6,305
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
  1,314
  1,412
  1,514
  1,620
  1,731
  1,846
  1,966
  2,091
  2,220
  2,355
  2,171
  2,317
  2,468
  2,625
  2,789
  2,959
  3,137
  3,322
  3,515
  3,716
  3,927
  4,146
  4,375
  4,615
  4,866
  5,128
  5,402
  5,689
  5,990
  6,305
Operating income, $m
  1,228
  1,482
  1,660
  1,846
  2,040
  2,242
  2,452
  2,670
  2,897
  3,133
  3,379
  3,957
  4,222
  4,497
  4,784
  5,082
  5,393
  5,716
  6,053
  6,405
  6,772
  7,155
  7,555
  7,973
  8,410
  8,867
  9,344
  9,844
  10,367
  10,915
  11,489
EBITDA, $m
  1,548
  2,356
  2,589
  2,831
  3,084
  3,348
  3,622
  3,907
  4,203
  4,511
  4,831
  5,164
  5,509
  5,869
  6,243
  6,632
  7,037
  7,460
  7,900
  8,359
  8,838
  9,338
  9,860
  10,405
  10,975
  11,571
  12,194
  12,847
  13,529
  14,244
  14,993
Interest expense (income), $m
  209
  245
  280
  316
  353
  392
  432
  474
  518
  563
  611
  660
  711
  764
  819
  876
  936
  998
  1,063
  1,131
  1,201
  1,275
  1,351
  1,431
  1,515
  1,603
  1,694
  1,790
  1,890
  1,995
  2,104
Earnings before tax, $m
  1,257
  1,237
  1,380
  1,531
  1,687
  1,850
  2,020
  2,196
  2,380
  2,570
  2,768
  3,297
  3,511
  3,733
  3,965
  4,206
  4,456
  4,718
  4,990
  5,274
  5,571
  5,881
  6,204
  6,542
  6,895
  7,264
  7,650
  8,054
  8,477
  8,920
  9,384
Tax expense, $m
  18
  334
  373
  413
  456
  500
  545
  593
  642
  694
  747
  890
  948
  1,008
  1,070
  1,136
  1,203
  1,274
  1,347
  1,424
  1,504
  1,588
  1,675
  1,766
  1,862
  1,961
  2,066
  2,175
  2,289
  2,408
  2,534
Net income, $m
  1,161
  903
  1,008
  1,117
  1,232
  1,351
  1,475
  1,603
  1,737
  1,876
  2,021
  2,407
  2,563
  2,725
  2,894
  3,070
  3,253
  3,444
  3,643
  3,850
  4,067
  4,293
  4,529
  4,775
  5,033
  5,303
  5,585
  5,880
  6,189
  6,512
  6,850

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
  23,699
  26,035
  28,476
  31,021
  33,671
  36,428
  39,295
  42,274
  45,371
  48,588
  51,933
  55,409
  59,025
  62,786
  66,701
  70,778
  75,025
  79,452
  84,068
  88,885
  93,913
  99,163
  104,649
  110,382
  116,377
  122,647
  129,207
  136,073
  143,261
  150,789
Adjusted assets (=assets-cash), $m
  21,390
  23,699
  26,035
  28,476
  31,021
  33,671
  36,428
  39,295
  42,274
  45,371
  48,588
  51,933
  55,409
  59,025
  62,786
  66,701
  70,778
  75,025
  79,452
  84,068
  88,885
  93,913
  99,163
  104,649
  110,382
  116,377
  122,647
  129,207
  136,073
  143,261
  150,789
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
  16,521
  18,150
  19,852
  21,626
  23,473
  25,395
  27,394
  29,471
  31,630
  33,873
  36,204
  38,628
  41,149
  43,771
  46,500
  49,342
  52,303
  55,389
  58,608
  61,966
  65,471
  69,131
  72,955
  76,952
  81,131
  85,502
  90,076
  94,862
  99,874
  105,121
Working capital, $m
  -1,119
  -380
  -418
  -457
  -498
  -540
  -585
  -631
  -678
  -728
  -780
  -833
  -889
  -947
  -1,008
  -1,070
  -1,136
  -1,204
  -1,275
  -1,349
  -1,426
  -1,507
  -1,591
  -1,679
  -1,771
  -1,868
  -1,968
  -2,074
  -2,184
  -2,299
  -2,420
Total debt, $m
  7,213
  7,997
  9,015
  10,079
  11,189
  12,344
  13,547
  14,796
  16,096
  17,446
  18,849
  20,307
  21,822
  23,399
  25,039
  26,746
  28,523
  30,375
  32,305
  34,318
  36,418
  38,610
  40,899
  43,291
  45,791
  48,404
  51,138
  53,998
  56,992
  60,126
  63,408
Total liabilities, $m
  9,549
  10,333
  11,351
  12,415
  13,525
  14,680
  15,883
  17,132
  18,432
  19,782
  21,185
  22,643
  24,158
  25,735
  27,375
  29,082
  30,859
  32,711
  34,641
  36,654
  38,754
  40,946
  43,235
  45,627
  48,127
  50,740
  53,474
  56,334
  59,328
  62,462
  65,744
Total equity, $m
  12,057
  13,366
  14,684
  16,060
  17,496
  18,990
  20,545
  22,162
  23,843
  25,589
  27,404
  29,290
  31,251
  33,290
  35,411
  37,619
  39,919
  42,314
  44,811
  47,415
  50,131
  52,967
  55,928
  59,022
  62,256
  65,636
  69,173
  72,873
  76,745
  80,799
  85,045
Total liabilities and equity, $m
  21,606
  23,699
  26,035
  28,475
  31,021
  33,670
  36,428
  39,294
  42,275
  45,371
  48,589
  51,933
  55,409
  59,025
  62,786
  66,701
  70,778
  75,025
  79,452
  84,069
  88,885
  93,913
  99,163
  104,649
  110,383
  116,376
  122,647
  129,207
  136,073
  143,261
  150,789
Debt-to-equity ratio
  0.598
  0.600
  0.610
  0.630
  0.640
  0.650
  0.660
  0.670
  0.680
  0.680
  0.690
  0.690
  0.700
  0.700
  0.710
  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
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
  903
  1,008
  1,117
  1,232
  1,351
  1,475
  1,603
  1,737
  1,876
  2,021
  2,407
  2,563
  2,725
  2,894
  3,070
  3,253
  3,444
  3,643
  3,850
  4,067
  4,293
  4,529
  4,775
  5,033
  5,303
  5,585
  5,880
  6,189
  6,512
  6,850
Depreciation, amort., depletion, $m
  320
  874
  928
  985
  1,044
  1,106
  1,170
  1,237
  1,306
  1,378
  1,453
  1,207
  1,288
  1,372
  1,459
  1,550
  1,645
  1,743
  1,846
  1,954
  2,066
  2,182
  2,304
  2,432
  2,565
  2,704
  2,850
  3,003
  3,162
  3,329
  3,504
Funds from operations, $m
  1,378
  1,777
  1,936
  2,102
  2,276
  2,457
  2,644
  2,840
  3,043
  3,254
  3,473
  3,614
  3,851
  4,097
  4,353
  4,620
  4,898
  5,187
  5,489
  5,804
  6,132
  6,475
  6,833
  7,207
  7,598
  8,007
  8,435
  8,882
  9,351
  9,841
  10,354
Change in working capital, $m
  -84
  -36
  -37
  -39
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -58
  -60
  -63
  -65
  -68
  -71
  -74
  -77
  -81
  -84
  -88
  -92
  -96
  -101
  -105
  -110
  -115
  -121
Cash from operations, $m
  1,462
  1,813
  1,974
  2,142
  2,317
  2,499
  2,689
  2,886
  3,091
  3,304
  3,525
  3,667
  3,906
  4,155
  4,414
  4,683
  4,963
  5,256
  5,560
  5,878
  6,210
  6,556
  6,917
  7,295
  7,690
  8,103
  8,535
  8,988
  9,461
  9,956
  10,475
Maintenance CAPEX, $m
  0
  -499
  -551
  -605
  -662
  -721
  -782
  -847
  -913
  -982
  -1,054
  -1,129
  -1,207
  -1,288
  -1,372
  -1,459
  -1,550
  -1,645
  -1,743
  -1,846
  -1,954
  -2,066
  -2,182
  -2,304
  -2,432
  -2,565
  -2,704
  -2,850
  -3,003
  -3,162
  -3,329
New CAPEX, $m
  -2,414
  -1,557
  -1,629
  -1,701
  -1,774
  -1,847
  -1,922
  -1,999
  -2,077
  -2,159
  -2,243
  -2,331
  -2,424
  -2,521
  -2,622
  -2,729
  -2,842
  -2,961
  -3,086
  -3,218
  -3,358
  -3,505
  -3,660
  -3,824
  -3,997
  -4,179
  -4,371
  -4,573
  -4,787
  -5,011
  -5,248
Cash from investing activities, $m
  -2,754
  -2,056
  -2,180
  -2,306
  -2,436
  -2,568
  -2,704
  -2,846
  -2,990
  -3,141
  -3,297
  -3,460
  -3,631
  -3,809
  -3,994
  -4,188
  -4,392
  -4,606
  -4,829
  -5,064
  -5,312
  -5,571
  -5,842
  -6,128
  -6,429
  -6,744
  -7,075
  -7,423
  -7,790
  -8,173
  -8,577
Free cash flow, $m
  -1,292
  -242
  -206
  -165
  -119
  -69
  -16
  41
  100
  163
  227
  207
  276
  347
  420
  495
  571
  650
  731
  813
  898
  985
  1,075
  1,167
  1,262
  1,359
  1,460
  1,564
  1,672
  1,783
  1,898
Issuance/(repayment) of debt, $m
  618
  1,000
  1,019
  1,064
  1,110
  1,155
  1,202
  1,250
  1,299
  1,350
  1,403
  1,458
  1,516
  1,576
  1,640
  1,707
  1,777
  1,852
  1,930
  2,013
  2,100
  2,192
  2,289
  2,392
  2,500
  2,614
  2,734
  2,860
  2,994
  3,134
  3,282
Issuance/(repurchase) of shares, $m
  1,080
  406
  310
  259
  204
  144
  80
  14
  0
  0
  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
  1,406
  1,329
  1,323
  1,314
  1,299
  1,282
  1,264
  1,299
  1,350
  1,403
  1,458
  1,516
  1,576
  1,640
  1,707
  1,777
  1,852
  1,930
  2,013
  2,100
  2,192
  2,289
  2,392
  2,500
  2,614
  2,734
  2,860
  2,994
  3,134
  3,282
Total cash flow (excl. dividends), $m
  1,109
  1,163
  1,123
  1,158
  1,194
  1,230
  1,267
  1,304
  1,399
  1,513
  1,630
  1,665
  1,792
  1,923
  2,060
  2,202
  2,349
  2,502
  2,661
  2,826
  2,998
  3,177
  3,364
  3,558
  3,761
  3,973
  4,194
  4,424
  4,665
  4,917
  5,180
Retained Cash Flow (-), $m
  -1,244
  -1,309
  -1,318
  -1,376
  -1,435
  -1,495
  -1,555
  -1,617
  -1,681
  -1,746
  -1,815
  -1,886
  -1,961
  -2,039
  -2,121
  -2,208
  -2,299
  -2,395
  -2,497
  -2,604
  -2,717
  -2,836
  -2,961
  -3,094
  -3,234
  -3,381
  -3,536
  -3,700
  -3,872
  -4,054
  -4,245
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
 
  -146
  -195
  -218
  -241
  -265
  -288
  -313
  -281
  -234
  -185
  -221
  -169
  -116
  -62
  -7
  50
  106
  164
  222
  282
  342
  403
  465
  528
  592
  657
  724
  793
  863
  935
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
 
  -137
  -170
  -176
  -178
  -178
  -175
  -170
  -135
  -99
  -68
  -70
  -45
  -26
  -11
  -1
  6
  10
  12
  12
  12
  10
  9
  7
  6
  4
  3
  2
  1
  1
  1
Current shareholders' claim on cash, %
  100
  97.2
  95.4
  94.0
  93.0
  92.4
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0
  92.0

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 11.5
Price to Sales 5.3
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 9.2
Price to Free Cash Flow -14.1
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 10.4% 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 330.046 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 $14.3 billion.

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COMPANY NEWS

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▶ MLP Rating Updates for the Week Ending January 12   [Jan-16-18 02:50PM  Market Realist]
▶ Is Spectra Energy Partners LP (NYSE:SEP) Undervalued?   [Jan-10-18 04:12PM  Simply Wall St.]
▶ 32 Undervalued Stocks   [Jan-02-18 06:00AM  Morningstar]
▶ Enbridge's Growth Portfolio Is Underappreciated   [Dec-27-17 07:00AM  Morningstar]
▶ Institutional Activity in Spectra Energy Partners in 3Q17   [Nov-17-17 07:32AM  Market Realist]
▶ NYSE Top Dividend Stocks Newell Brands And More   [08:02AM  Simply Wall St.]
▶ Enbridge Keeps Its Foot on the Gas in the 3rd Quarter   [Nov-06-17 07:07PM  Motley Fool]
▶ MLP Rating Updates Last Week   [Oct-31-17 03:42PM  Market Realist]
▶ 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]
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.

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