Strength in Midstream Stocks: Will It Continue?

Midstream stocks surge

So far, top midstream stocks including Kinder Morgan (KMI), Enterprise Products Partners (EPD), and Williams Companies (WMB) have risen significantly in 2019. Kinder Morgan, Enterprise Products Partners, and Williams Companies have risen ~31%, 13%, and 24%, respectively, year-to-date. ONEOK (OKE) has risen 22%, while Energy Transfer (ET) has risen 13%. The key sector trends seem positive and support the near-term outlook for these stocks.

Strength in Midstream Stocks: Will It Continue?

In addition to the price returns, midstream stocks offer attractive yields. Over time, investors can look at the total returns instead of just the price returns for these stocks.

Three-year total returns

Most of the top midstream stocks generated positive total returns over the last three years, unlike the negative returns generated over five years.

Over the last three years, ONEOK generated total returns of ~193%. Energy Transfer generated total returns of 123% over three years. Cheniere Energy Partners (CQP), Targa Resources (TRGP), and Williams Companies generated total returns of 88%, 78%, and 71%, respectively. Enterprise Products Partners and MPLX (MPLX) generated total returns of 39% and 50%, respectively.

Five-year and seven-year returns

Enterprise Products Partners’ five-year and seven-year total returns are 10% and 56%, respectively. ONEOK generated 46% and 154% total returns, respectively, over the five-year and seven-year periods. Cheniere Energy Partners outperformed with five-year total returns of 93% and seven-year returns of 175%.

With total returns of 28% in a year, Kinder Morgan seems to be on its way to higher returns after negative returns over the five-year and seven-year periods.

Next, we’ll discuss analysts’ recommendations for the top midstream stocks.