ENBL - Enable Midstream Partners: The Ship Took On Water Very High Yield Still Floating But Remains Risky

• Enable Midstream Partners halved their distributions at the start of 2020 due to the COVID-19 inspired downturn but still offer a very high yield of around 12%.
• Even though their operating cash flow has taken a sizable hit recently, it still remains sufficient to cover their current distributions and capital expenditure.
• In theory, once operating conditions recover, they could afford to cover and thus reinstate their previous distributions in three to five years, provided that they maintain their capital discipline.
• The main risk to their current distributions is not their high leverage, but rather their weak liquidity but thankfully this should fix itself across time.
• Their distributions could go either way in the short term and whilst this may not sound bullish, I still believe that a bullish rating is appropriate as their very high yield compensates for this risk.

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