These MLPs Took June in Stride
Top MLP gainers of June 2017
EQT GP Holdings (EQGP), the GP (general partner) of EQT Midstream Partners (EQM), was the top-performing MLP (master limited partnership) in June. EQGP’s shares rallied following the announcement that its sponsor, EQT Corporation (EQT), would acquire Rice Energy (RICE), an Appalachia-based natural gas producer.
EQGP, which depends on EQM for distribution income, is expected to benefit from rising growth opportunities at EQM following the acquisition. Currently, EQGP is one of the leading distribution growth MLPs. The partnership is targeting 40% distribution growth for 2017 and 30%–40% distribution growth for 2018.
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However, EQGP’s gains in June were slightly offset by the plunge following uncertainties over the EQT-RICE merger completion. (For details, check out Market Realist’s series At It Again: Jana Partners Seeks to Obstruct EQT-RICE Deal.)
Calumet Specialty Products Partners
Calumet Specialty Products Partners (CLMT), which is mainly involved in crude oil refining and production of specialty products, rose 9.0% in June 2017. CLMT’s gains last month can be attributed to the decline in commodity prices. (For details on the performance of US refining stocks in 2Q17, read Market Realist’s A Look at Refining Stocks’ Post-1Q17 Performance.)
Star Gas Partners
Star Gas Partners (SGU), the largest US retail distributor of home heating oil, was the third-biggest gainer last month, gaining 8.5%. The stock has rallied for most of the period after touching a YTD (year-to-date) low of $8.9.
KNOT Offshore Partners (KNOP) and Delek Logistics Partners (DKL) were among the top performing MLPs in June, rising 8.3% and 8.1%, respectively. The recent rally in DKL’s shares can be attributed to the successful acquisition of Alon USA by Delek US Holdings (DK). The acquisition is expected to drive DKL’s throughput volumes.