With strengthening oil prices, investors’ interest in the energy sector is on the rise. One of the important questions in the minds of investors—the ones who haven’t already reentered the sector—is whether now is the right time to invest.
In this series, we’ll take a look at what returns the top midstream energy companies actually generated over the last one-, three-, and five-year periods. Later in the series, we’ll see the yields these companies currently offer and the upside potential for them according to Wall Street analysts.
The above chart shows the one-year total returns—that’s price appreciation and dividend—generated by the top ten midstream companies by market capitalization. As the graph shows, Oneok (OKE) generated the highest returns of 45% in the last year. It’s followed by MPLX (MPLX) and Enterprise Products Partners (EPD) with one-year returns of 17% and 15%, respectively.
The Energy Select Sector SPDR ETF (XLE), a representative of the energy sector of the S&P 500 Index, generated total returns of 18% in the last year. In comparison, the Alerian MLP Total Return Index generated returns of -3% over the same period.
Over the last three years, Oneok has been the outperformer, generating returns of more than 100%. Enterprise Products Partners and Magellan Midstream Partners (MMP) were the only other companies from the select list that generated positive returns over that period.
The Energy Select Sector SPDR ETF generated returns of 6%, and the Alerian MLP Total Return Index fell 22%.
Next, let’s see what these companies have generated over the last five years.