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NGL Energy Partners Has Fallen 16% in 2018: What’s Next?

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NGL’s yield

NGL Energy Partners (NGL) is trading at a yield of ~12.2%. The stock has fallen 16% so far in 2018 and 46% in the last year. The fall in NGL stock has pushed its yield higher. It paid a distribution of $0.39 per share for the quarter ended December 31, 2017. Its distributions have been flat for the last seven quarters. It cut distributions by 39% at the beginning of 2016.

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Steps to reduce leverage

In the quarter that ended December 31, 2017, NGL Energy Partners completed the sale of its 50% interest in Glass Mountain Pipeline for $300 million. It announced an agreement to sell a portion of its Retail Propane segment for $200 million. The sale is expected to close by March 31, 2018. NGL plans to use the proceeds from both transactions to pay down its debt.

On March 1, 2018, NGL Energy Partners announced a joint venture agreement with Haddington Ventures for its Sawtooth storage facility.

Analyst recommendations for NGL

Of the analysts surveyed by Reuters, 67% of them rate NGL Energy Partners a “buy,” and 33% rate it a “hold.” None of the surveyed analysts rate NGL a “sell.” Analysts’ mean price target for NGL is $15.50. The stock is trading at $12.25. If NGL Energy Partners attains its mean price target in a year, it would imply an upside of 27%.

In comparison, 96% of the surveyed analysts rated Enterprise Products Partners (EPD) a “buy,” and 80% rated Williams Partners (WPZ) a “buy.”

To find out what institutional investors did with their top MLP holdings in 4Q17, be sure to read Institutional Investors Placed Their Bets on These MLPs in 4Q17.

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