Why DCP Midstream Partners’ Coverage Ratio Could Increase
DPM has substantial liquidity of $1.25 billion under its revolver credit facility. With a current debt-to-EBITDA ratio of 3.3x and a TTM coverage ratio of 1.1x, DPM has a cushion for raising fresh capital.
DPM received a “buy” rating from 53.3% of the analysts, while 13.3% rated it as “sell.” The remaining 33.3% of the analysts recommended a “hold.”
DPM generates 60% of its earnings from fee-based contracts and 35% from PoP contracts. Under its PoP contracts, these earnings are linked to movement in energy prices.
NGL Logistics was DPM’s top-performing segment in 1Q15. The segment’s adjusted EBITDA increased by 129.4% in 1Q15 QoQ, driven by an increase in NGL pipeline throughput volumes.
The increase in DPM’s EBITDA was driven by strong operating performance from its NGL Logistics and Wholesale Propane Logistics segments.
Since November 2014, DCP Midstream Partners’ stock has fallen by ~25%. Flat distribution growth and falling natural gas prices may impact its stock.
Williams Partners LP was the top midstream performer in the week ending May 15, with a ~20.5% return. It was followed by its general partner Williams Companies Inc., with a ~5.6% gain.
Sunoco Logistics (SXL) will share the proportionate capital expenditure in the Bakken Pipeline project. This led SXL to revise its capital expenditure for 2015.
Sunoco Logistics (SXL) expects its distribution to grow by 20% in 2015 through fee-based organic projects that are expected to drive distribution growth.
In its 1Q15 earnings release, Sunoco Logistics (SXL) announced distributions per unit of $0.419. This is an increase of 20.6% on a year-over-year basis.
Sunoco Logistics’ (SXL) Product Pipelines segment was the top performing segment in 1Q15. Adjusted EBITDA increased by 152.9% on a year-over-year basis.
Sunoco Logistics (SXL) released its 1Q15 earnings on May 6. EBITDA increased year-over-year by $13 million to $221 million but fell short of the $261.7 million estimate.
ONEOK (OKE), the general partner for MLP ONEOK Partners (OKS), was the top midstream loser last week, with a ~8% drop.
Recent Wall Street recommendations show 52.4% of Bloomberg analysts rating Targa Resources as “buy.” The remaining 47.6% rate the company as “hold.”
On February 27, Targa Resources Partners (NGLS) announced that it closed the acquisition of Atlas Pipeline Partners and Atlas Energy.
For its Field Gathering and Processing segment, gross margin decreased from $139 million in 1Q14 to $134.7 million in 1Q15, primarily due to lower commodity prices.
After Targa Resources Partners (NGLS) announced its 1Q15 earnings on May 5, its stock performance increased marginally, from $45.09 on previous close to $45.32.
Targa Resources Partners’ revenues for 1Q15 declined by 27% to $1.67 billion compared to $2.29 billion for the same quarter of 2014. Targa says it’s a result of lower commodity prices.
Among the midstream movers, Breitburn Energy Partners (BBEP) was the top gainer in the week to May 1 with a return of 6%. Enbridge (ENB) was the top loser with a 3% drop.
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