Wall Street Analysts’ Calls on DCP Midstream Partners Stock
Wall Street analysts’ calls show about 56% of analysts tracking DCP Midstream (DPM) rate it a buy. About 31% rate it a hold, and 13% rate it a sell.
DCP Midstream’s valuation when compared to its peers shows DCP Midstream’s projected EV-EBITDA multiple of 10.4 is at par with its peers’ average.
In the past 12 quarters, since 1Q12, DCP Midstream’s distribution per unit increased 18% to $0.78 per unit in 4Q14. Since 4Q13, distribution increased 6%.
In 2015, DCP Midstream’s 2015 capex is projected to be ~$355 million, or 5% higher than its 2014 capex.
There’s a variety of issues that have affected DCP Midstream’s operations and performance. How much have they affected DCP Midstream’s market performance?
DCP Midstream’s 4Q14 earnings fell short of estimates by 6% in adjusted revenues. But adjusted revenues exceeded consensus revenues by 3% in ten quarters.
Adjusted EBITDA for the Propane Logistics segment declined 71% to $10 million compared to $34 million a year ago. Adjusted EBITDA margin fell sharply to 2.5% in 2014.
Revenues in the NGL Logistics segment remained unchanged at $73 million in 2014 over 2013. In 2014, however, adjusted EBITDA increased 48% to $126 million.
DCP Midstream’s 4Q14 revenue results were released on February 24, 2015. Its fourth-quarter revenues increased 7.3% over 4Q13.
Revenues in the Natural Gas Services segment increased 22% to $3.16 billion in 2014, from $2.59 billion in 2013.
The Wholesale Propane Logistics segment serves propane and other liquefied petroleum gas markets through its pipelines and terminal assets in seven states.
DCP Midstream’s NGL Logistics segment transports NGLs from processing plants to fractionation facilities, petrochemical plants, and third-party storage facilities.
DCP Midstream’s natural gas and energy infrastructure business is affected by the relationship between commodities such as NGLs and natural gas.
Natural gas volume and price are the primary factors that affect DCP Midstream’s natural gas business.
DCP Midstream’s Natural Gas Services segment provides natural gas gathering, compressing, treating, processing, transporting, and storing services.
Unit price for DCP Midstream decreased 24% in the past year. The fall is particularly sharp since the end of October when its unit price crashed 32%.
It’s important to note that 60% of analysts rated MPLX as “buy.” The other 40% rated the company as “hold.” The consensus 12-month target price was $84.06.
MPLX stock initially declined in September 2014. This is the starting point that we took for the comparison. It’s also when oil prices started declining rapidly.
Marathon Petroleum (MPC) accounts for 85% of the volumes shipped on MPLX’s (MPLX) pipelines. This gives MPLX stable and predictable cash flows.
MPLX LP expects to spend $222 million on organic projects this year. Its capital expenditure is expected to be $38 million. Total spending is expected to be $260 million.
But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.