In the following video, Joel South gives investors three things to think about regarding investing in or selling Energy Transfer Partners.
First, ETP hasn't increased its distributions since 2008, probably because of the Sunoco acquisition and a $3.1 billion company buildout since 2010. However, companies such as Plains All American have also made acquisitions and built out their companies but also increased their distributions. Why hasn't ETP done likewise?
Second, ETP has greater exposure to commodity prices than other pipeline companies do. While most competitors use a fee-based business model to insure cash flow, ETP has only recently moved toward this model.
Third, for all its acquisitions and buildout efforts, there's no tangible proof of increased cash flow. The Sunoco acquisition, for example, should help in this regard, but so far it hasn't had much impact on corporate revenues.
