NEW YORK (TheStreet) -- Energy Transfer Partners (ETP) stock is increasing by 6.02% to $29.95 in early-afternoon trading on Thursday, after the company updated investors about its fourth quarter distribution and 2016 capital expenditures and funding requirements yesterday evening.
Energy Transfer Partners maintained its quarterly distribution of $1.055 per unit for the quarter. The distribution will be paid on February 16 to unitholders of record as of February 8.
The company plans to reduce its capital expenditures by $750 million this year, to $4.2 billion from the $4.95 billion projected in November.
Energy Transfer Partners also announced that it might reduce the amount of spending needed for the Bakken pipeline, and it has reached an agreement with its general partner Energy Transfer Equity (ETE) to extend the $95 million annual management fee paid to Energy Transfer Partners through this year.
The company doesn't anticipate that it will need to tap the capital markets during 2016.
Insight from TheStreet Research Team:
Jim Cramer, Portfolio Manager of Action Alerts PLUS and Jack Mohr, Director of Research mentioned Lockheed Martin in a recent post. Here is a snippet of what Jim Cramer and Jack Mohr had to say about the stock:
Management did not outright declare they will be maintaining distribution going forward, but the decision to significantly reduce the growth capex budget for 2016 all but implies ETP will be maintaining its current quarterly distribution for the rest of the year.
While we may will learn more in the coming days (at the very latest, we'll have the full picture by ETP's Feb. 24 earnings release and conference call), it is quite a relief to see the company is taking the actions necessary to protect its distribution and investment-grade credit rating while reducing its spending burden and capital funding requirements amid the tumultuous environment.
While we can never predict how the market will respond to the news given the volatile, illogical nature of the trade, we view today's news as undoubtedly positive, and a testament to the value of patience.
-Jim Cramer and Jack Mohr "ETP Has Good News on Distribution" Originally Published on 1/27/2016 on Action Alerts PLUS.
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Separately, TheSreet Ratings team rates the stock as a "hold" with a ratings score of C.
Energy Transfer Partners' strengths such as its good cash flow from operations and notable return on equity are countered by weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and poor profit margins.
You can view the full analysis from the report here: ETP
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.