Cheniere Energy Partners Saw Highest Earnings Growth of Top MLPs


May. 14 2018, Published 2:34 p.m. ET

CQP posted 107% YoY EBITDA growth

Cheniere Energy Partners (CQP), the MLP[1. Master limited partnership] subsidiary of Cheniere Energy (LNG), continues to lead in terms of earnings growth among top MLPs and among all the constituents of the Alerian MLP ETF (AMLP). CQP posted 106.6% YoY[2. Year-over-year] EBITDA[3. Earnings before interest, tax, depreciation, and amortization] growth in the first quarter of 2018. Moreover, it surprised the markets with an earnings beat of 19.7%. Cheniere Energy, which reports earnings at the consolidated level, saw similar earnings growth during the first quarter. For CQP’s and LNG’s earnings drivers, see Cheniere Energy Beats Wall Street Again, Increases 2018 Guidance.

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Increased 2018 distribution

Cheniere Energy Partners declared a distribution of $0.55 per unit for the first quarter of 2018, which represents a 10.0% increase compared to the previous quarter and a massive 28.0% increase compared to the same quarter in the prior year. Moreover, the partnership also increased its distribution guidance for 2018. It now expects full-year distribution of $2.2–$2.3 per unit for 2018, compared to the previous guidance of $2.0–$2.2. Based on the recent distribution, CQP is trading at an attractive distribution yield of 7.1%.

Analysts’ recommendations

Bernstein last upgraded CQP to “outperform,” which is equivalent to “buy,” from “market perform,” which is equivalent to “hold.” CQP’s is currently trading close to the low range ($31) of analysts’ target price. Its average target price of $35.2 implies ~13% upside potential from the current price.


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