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Midcoast Energy Partners: Top Midstream Gainer on July 31

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Top gainers

Midcoast Energy Partners (MEP) was the top gainer among midstream MLPs at the end of trading on Friday, July 31. The company’s winning streak continued. The stock rose 3.31% on Friday after rising 25.31% the day before.

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Midcoast Energy Partners

Midcoast Energy Partners continued to rise after the announcement of an increase in its quarterly distribution and better-than-expected 2Q15 results released on July 29, 2015. It declared a distribution per unit of $0.3475 for 2Q15. This represents an 8.50% YoY (year-over-year) rise versus 2Q14 and a 1.40% sequential rise over 1Q15. The partnership’s 2Q15 adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and distributable cash flow rose by 34.70% YoY and 46.70% YoY, respectively, over 2Q14.

Midcoast Energy Partners was formed by Enbridge Energy Partners (EEP) to own and grow its natural gas and NGL (natural gas liquid) midstream business in the US. Both of the partnerships are part of Enbridge (ENB). Currently, Midcoast Energy Partners operates the following two businesses:

  • natural gas gathering, processing, and transportation
  • logistics and marketing

According to Midcoast Energy, its “Logistics and Marketing business markets natural gas, NGLs and condensate received from the gathering, processing and transportation business to wholesale customers.”

TC Pipelines

TC Pipeline (TCP) is next on our list of the top midstream MLP gainers. It rose 1.42% on Friday. The stock has returned -19.55% YTD (year-to-date). TC Pipeline is primarily involved in natural gas transportation.

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Other gainers

The next three stocks on the list of the top five midstream MLP gainers on July 21 are DCP Midstream (DPM), MarkWest Energy Partners (MWE), and Sunoco Logistics (SXL). They rose 1.40%, 1.13%, and 0.92%, respectively. These three stocks have returned -31.32%, -2.60%, and -10.44% YTD. Despite the recent slump in energy prices, Sunoco Logistics has a strong distribution growth profile—compared to the three other transportation and terminaling MLPs that we covered in a peer analysis series. To learn more, read Analyzing 4 Top US Transportation and Terminaling MLPs.

The Alerian MLP ETF (AMLP) is comprised of 25 midstream MLPs. It fell 0.52% on Friday. Together, TC Pipeline, DCP Midstream, MarkWest Energy Partners, and Sunoco Logistics account for ~18.12% of AMLP. For context, the upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 2.29% on the same day.

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