We have been watching Enterprise Products Partners closely in light of the substantial excess capacity in the midstream industry. Service providers' forecasts of production growth have turned out to be overly optimistic, resulting in too much infrastructure development that has been further accentuated by the pandemic-driven decline in domestic energy production. Source: Enterprise Products Partners, Investor Presentation This environment could pressure midstream service providers' future cash flow as contracts expire and potentially renew at lower rates and reduced volume commitments. Enterprise hosted an analyst day earlier this month, providing the most recent look at where the midstream industry might be headed. The meeting highlighted improving production rates and increased capacity utilization.Oil and gas production has bounced off pandemic lows while natural gas [...]

Iron Mountain reported earnings on Wednesday and delivered better-than-feared results for the year. Sales in 2020 fell 3%, and adjusted EBITDA was flat. But the bigger story was management's guidance. Iron Mountain expects 2021 organic revenue and adjusted EBITDA to grow by 2-6% and 7-10%, respectively. If realized, this would mark the company's highest level of growth in a decade and nudge Iron Mountain's payout ratio and leverage closer to management's target levels. Based on the midpoint of guidance, the REIT's adjusted funds from operations (AFFO) payout ratio is projected to sit near 75% this year. That's down from 82% in 2019 and could reach the firm's long-term target (low to mid-60s) by 2023.

Energy Transfer on Wednesday announced plans to acquire Enable Midstream in a $7 billion all-equity transaction. This deal will increase Energy Transfer's units outstanding by about 14%, but management plans to maintain the firm's current $0.61 per unit distribution. We estimate the combined company's distributable cash flow (DCF) payout ratio will remain practically unchanged from Energy Transfer's current projected level near 30%. Similarly, our analysis suggests that Energy Transfer's net debt-to-forward adjusted EBITDA leverage ratio will remain near 4.9x, ticking down less than 0.1x compared to Energy Transfer's standalone metrics. Management previously targeted a leverage range of 4.0x to 4.5x, so this acquisition does not immediately push Energy Transfer much closer to its goal.

Investors will have to wait a little longer to find out how much AT&T spent in a recent record-setting auction for spectrum and how its deleveraging plans will be impacted. As part of its earnings report in late January, AT&T told investors it was still in the quiet period for the FCC's spectrum auction and could not comment on the details of its bids yet. The company will instead host an analyst day by the end of March to update investors on where its leverage ratio stands following the auction and provide goals for the future. The recently frozen dividend will remain part of the plan, with management "committed to sustaining our dividend at current levels" after finishing 2020 with a "payout ratio at [...]