uploads/2016/05/NSPC5.png

Why Rice Midstream Is the Best-Performing MLP among Its Peers

By

Updated

Series overview

In this series, we’ll perform a comparative analysis of four small to mid-size gathering MLPs (master limited partnerships). The four peers we’ve chosen are:

  • Antero Midstream Partners (AM)
  • Cone Midstream Partners (CNNX)
  • Rice Midstream Partners (RMP)
  • Summit Midstream Partners (SMLP)

We’ll compare the four peers based on various key parameters throughout the series and look at the analysts’ recommendations for these MLPs in the final part. Let’s start with an analysis of their one-year market performance and a brief overview.

Article continues below advertisement

Antero Midstream Partners

Antero Midstream Partners (AM) has returned -11.0% over the past year. AM outperformed the Alerian MLP ETF (AMLP), which comprises 24 US midstream energy MLPs, by 15.8%. Antero Midstream Partners provides natural gas gathering and compression and water delivery services mainly to its sponsor, Antero Resources Corporation (AR).

Summit Midstream Partners

Summit Midstream Partners (SMLP) is the worst-performing MLP in terms of market performance among the selected peers. It has returned -29.6% over the past year. SMLP underperformed AMLP by 2.8%. The partnership mainly provides natural gas, crude oil, and water-gathering services.

Article continues below advertisement

Rice Midstream Partners

Rice Midstream Partners (RMP) is the best-performing MLP among the selected peer group in terms of market performance. It has returned 7.7% in the past year. RMP outperformed AMLP by 34.5%. RMP provides gathering, compression, and dehydration services mainly to its sponsor, Rice Energy (RICE).

As compared to its peers, RMP’s market performance likely reflects its low commodity price exposure, relatively low leverage, and strong distribution and earnings growth guidance.

Cone Midstream Partners

Cone Midstream Partners (CNNX) has lost 24.7% of its market value in the past year. It outperformed AMLP by 2.1%. Consol Energy (CNX) and Noble Corporation (NBL) formed CNNX to provide gathering, compression, and dehydration services.

Advertisement

More From Market Realist