Metrics That Matter: Talking MLP Debt

Master limited partnerships are great because they pay out boatloads of cash directly to investors. Unfortunately, that doesn't leave much capital to grow a business with, so MLPs must also issue a lot of debt. In this video, Fool.com contributor Aimee Duffy explains how to compare the debt situations at MLPs that vary in size, using the debt-to-adjusted-EBITDA ratio for Enterprise Products Partners (EPD +0.58%), Sunoco Logistics Partners (NYSE: SXL), Magellan Midstream Partners (MMP +0.00%), and Plains All American Pipeline (PAA +0.90%). Aimee indicates how to calculate the metric, and why it's so crucial to this space.