Hi-Crush Partners (HCLP) stock is up 19% so far in 2018. The stock outperformed peers Emerge Energy Services (EMES) and U.S. Silica Holdings (SLCA) during this period. Emerge Energy Services is up 2% year-to-date, whereas U.S. Silica Holdings is down 12% over the same timeframe. The Energy Select Sector SPDR ETF (XLE) is up 3% year-to-date.
Crude oil prices are up nearly 7% in 2018. Learn more about the latest factors impacting crude oil prices in Strong Dollar and US Crude Oil Output Pressure Oil Prices. The above graph compares Hi-Crush Partners stock with its peers in 2018. Peer Fairmount Santrol completed a merger with Unimin and started trading as Covia Holdings (CVIA) on June 1.
Increased drilling activity and expected growth in frac-sand demand likely contributed to Hi-Crush Partners’ rise. Growth in HCLP’s contribution margin driven by higher pricing and increased in-basin sales also contributed to the stock’s rise in 2018. The company expects the margin to improve further in Q2 2018 due to tightness in frac sand demand and supply. Hi-Crush Partners’ average sales price rose to $73 per ton in the first quarter of 2018 compared to $71 per ton in Q4 2017.
Hi-Crush Partners stock is trading at an attractive yield of ~6.9%. Moreover, the company expects quarterly distribution growth of ~10% per quarter for the foreseeable future.
Let’s next take a look at factors that may drive Hi-Crush Partners’ growth.