Genesis Energy: A Top Performer this Year

In the midst of a sell-off in energy securities, including relatively safer MLPs, Genesis Energy (GEL) is one of the few MLPs that stand out in terms of total return performance.

In this series, we’ll look at a detailed overview of Genesis Energy’s operating segments, analyze its financials, and try to find out the reasons for its solid YTD (year-to-date) performance. We’ll also look at analyst recommendations for the MLP. But first, let’s analyze its YTD total return performance.

YTD (year-to-date), Genesis Energy outperformed the Alerian MLP ETF (AMLP), which comprises 23 midstream MLPs, by 19.4 percentage points. Genesis Energy, which mostly stayed positive during the recent turmoil in the energy sector, has returned 2% YTD. AMLP has returned -17.39% YTD.

Genesis Energy’s peers Plains All American Pipeline (PAA), Sunoco Logistics (SXL), and NGL Energy Partners (NGL) have returned -35.92% YTD, -27.28% YTD, and -7.02% YTD, respectively. This indicates general weakness in the energy sector. GEL, PAA, SXL, and NGL are among the 23 holdings of the Global X MLP ETF (MLPA). GEL alone constitutes 3.3% of MLPA.

Genesis Energy is a diversified midstream MLP focused in the Gulf Coast region of the United States. The partnership provides services around and within refinery complexes.

According to Genesis Energy in a recent annual filing, “Upstream of the refineries, we provide gathering and transportation of crude oil. Within the refineries, we provide services to assist in their sulfur balancing requirements. Downstream of refineries, we provide transportation services as well as market outlets for their finished refined products.”

Genesis Energy provides services through its five business segments:

• Onshore Pipeline Transportation
• Offshore Pipeline Transportation
• Refinery Services
• Marine Transportation
• Supply and Logistics

In the following articles, we’ll get a brief overview of each segment and understand their underlying value drivers.