More From Rekha Khandelwal, CFA
What to Expect from Kinder Morgan’s Gas Transport Volumes
Kinder Morgan’s (KMI) natural gas transport volumes grew 1.4% YoY (year-over-year) in 1Q17. The growth was driven by throughput on new projects.
Analyzing Kinder Morgan’s Leverage
Kinder Morgan’s adjusted net debt-to-adjusted EBITDA ratio stood at 4.5x at the end of 2018.
How Does Phillips 66 Partners’ Valuation Compare to Its Peers’?
Phillips 66 Partners’ forward distribution yield of 3.3%, owing to its fee-based revenues, consistent distribution growth, and strong coverage ratio.
Is ONEOK Positioned Well Enough to Continue Growing Its Earnings?
Of the analysts surveyed by Bloomberg, 12% rated ONEOK (OKE) a “buy,” and 76% rated it a “hold.” About 12% of the analysts rated it a “sell.”
Is ONEOK Stock Currently Overvalued?
ONEOK (OKE) stock is currently trading at a forward EV-to-EBITDA multiple of 14.3x.
What’s behind Sunoco’s Rise This Year?
Sunoco’s rise Sunoco (SUN) has risen nearly 13% so far in 2017. In comparison, the Alerian MLP Index has fallen nearly 15%. Energy Transfer Equity (ETE)—Sunoco’s parent—owns Sunoco’s GP (general partner) interests and IDRs (incentive distribution rights). Sunoco operates retail fuel sites and convenience stores and distributes motor fuel to convenience stores, dealers, commercial customers, and distributors. […]
Which Segment Drives Kinder Morgan’s Performance?
KMI’s Natural Gas Pipelines segment Kinder Morgan (KMI) conducts its operations through five reportable segments. Natural Gas Pipelines is Kinder Morgan’s largest business segment in terms of EBDA (earnings before depreciation and amortization). In 2Q16, the segment alone accounted for 54% of the company’s total EBDA. The segment gathers, processes, transports, and stores natural gas, […]
What KMI’s Implied Volatility Tells about Its Price This Week
Based on its closing price of $19.42 on May 25, KMI stock could trade in between $19.95 and $18.89 over the next seven days.
How Tax Cut Impacted Kinder Morgan’s 4Q17 Results
The reduction of the corporate income tax rate from 35% to 21% impacted Kinder Morgan’s (KMI) results in 4Q17.
Spectra Energy’s Capital Projects Should Fuel Its Dividend Growth
Spectra Energy’s distributable cash flow for 3Q15 was $223 million, compared with $236 million in 3Q14.
Short Interest in ONEOK Has Fallen 9% since July 14
Short interest as a percentage of float in ONEOK (OKE) stock is 3.8%. This is lower than mid-July’s reading of 4.1%.
Energy Transfer Partners’ Leverage Is Improving
Energy Transfer Partners’ (ETP) net debt-to-adjusted EBITDA stands at ~5.1x—the highest among the four MLPs that we’re discussing in this series.
Targa Resources’ Valuation Could Indicate a Buying Opportunity
Targa Resources (TRGP) stock has tripled in the last year, outperforming its peers in the sector. Let’s take a look at the stock’s current valuation.
Is Alon USA Partners’ Leverage a Concern for Investors?
Alon USA Partners’ net debt-to-equity ratio currently stands at 1.4x. It had total outstanding debt of $292 million at the end of 1Q16.
Three Analysts Upgraded Ferrellgas Partners in December 2016
On December 8, RBC Capital upgraded Ferrellgas Partners from “underperform” to “sector perform.” Piper Jaffray upgraded FGP from “underweight” to “neutral.”
Will Kinder Morgan Stock Continue to Surge in 2017?
Kinder Morgan stock has risen 44% in the past year, as compared to Enterprise Products Partners’ 32% rise and ONEOK’s 162% rise.
What Do Institutional Investors Think about CVR Refining?
Nearly 8.7% of CVR Refining’s (CVRR) floating shares are currently held by ~120 institutional investors.
Shell Midstream Trades at a Lower Distribution Yield than Its Peers
Shell Midstream Partners is trading at a forward distribution yield of about 3%. Its forward yield is nearly 5 percentage points lower than its peers.
87% of Wall Street Analysts Rate TransCanada a ‘Buy’
Of the analysts surveyed by Reuters, ~87% rated TransCanada (TRP) a “buy” and 13% rated it a “hold.” None of the surveyed analysts rated TRP a “sell.”
How Analysts View NOV and BHGE in August
Of the 27 analysts surveyed by Reuters covering National Oilwell Varco (NOV), one analyst rates the stock as “strong buy,” three analysts rate it as a “buy,” and 21 analysts rate it as a “hold.”
Analyzing Frac Sand Producers’ Cash Flow Measures
Emerge Energy Services reported negative distributable cash flow of -$4.2 million in 1Q17. Hi-Crush Partners managed to produce DCF of $0.1 million in 1Q17.
Which Segment Will Drive Plains All American’s 3Q16 Earnings?
PAA’s Transportation segment contributed ~57% to its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) in 2Q16.
Halliburton Beats Q3 Estimates but Falls on Lower Q4 Guidance
Halliburton (HAL) reported its third-quarter earnings results on October 22. The company reported EPS of $0.50.
ONEOK’s Natural Gas Pipelines Segment’s Volume Growth
ONEOK’s (OKE) natural gas transportation capacity contracted was 6,593 Mdth/d (thousand dekatherms per day) in 3Q17 up from 6,300 Mdth/d in 3Q16.
Plains All American’s 4Q17 Distributable Cash Flow Rose 15%
Plains All American Pipeline (PAA) reported its 4Q17 results on February 6, 2018. The company’s DCF (distributable cash flow) for 2017 fell 7% compared to 2016, while its DCF for 4Q17 rose 15% year-over-year.
JPMorgan’s Trading Revenues Fall 7% in 2Q15
JPMorgan’s revenues from fixed income markets declined 10% year-over-year in the second quarter of 2015. The drop excludes the impacts of one-off items.
Outlook for Plains All American Pipeline: 4Q15 and Beyond
Plains All American Pipeline has revised its mid-point EBITDA guidance for full year 2015 to $2.2 billion, 3% below the $2.3 billion guidance it had previously provided.
TRGP, CQP, and NBLX: Top Midstream Gains and Losses
Targa Resources (TRGP) was the top midstream underperformer last week. Targa Resources fell 8.0% for the week.
Why Is Dominion Midstream Underperforming the MLP Sector in 2016?
About 64% of the analysts surveyed have rated Dominion Midstream Partners (DM) a “buy,” 27% have rated it a “hold,” and 9% of the surveyed analysts have rated DM a “sell.”
ONEOK: Top Institutional Investors’ Increased Positions
The Vanguard Group, State Street Global Advisors, and Neuberger Berman added total net 2.7 million ONEOK shares to their positions.
Will Kinder Morgan Stock Continue to Trade Weak?
Kinder Morgan is trading below its 50-day and 200-day moving average levels. The stock temporarily crossed above the 50-day moving average on September 25.
Schlumberger: Do Analysts Expect the Stock to Rise?
For Schlumberger, seven analysts rated it as a “strong buy,” 15 rated it as a “buy,” 13 rated it as a “hold,” and one rated it as a “sell.”
How the Rise in Brent Oil and the Fall in WTI Impact MLPs
The NYMEX (New York Mercantile Exchange) near-month WTI (West Texas Intermediate) crude oil futures prices fell 0.9% in the week ending November 20. WTI prices closed at $40.4 per barrel on Friday.
PMI Index: Component Growth Impacts Banks
A growing economy definitely benefits the banking sector. The impact will be positive for big banks and also for regional banks.
Will ONEOK Continue to Outperform Its Peers?
ONEOK is trading 4% above its 50-day moving average and 8% above its 200-day moving average.
How a Fall in Fractionation Spread Affected MLPs Last Week
The Henry Hub-Mont Belvieu fractionation spread fell to $10.1 per barrel for the week ended October 16, 2015.
Will 1Q18 Earnings Support Enterprise Products Partners Stock?
So far, Enterprise Products Partners (EPD) stock has risen ~1% in 2018. The stock has outperformed the Alerian MLP ETF (AMLP).
Volatile Commodity Prices Hit MarkWest Energy’s Northeast Segment
“Keep-whole” contracts are commodity-price sensitive. Under keep-whole contracts, MarkWest Energy Partners generally keeps a portion of the NGLs extracted through fractionation as payment.
CLMT Reduces Capital Spending Significantly in 2016
For the full year 2016, Calumet Specialty Products Partners (CLMT) anticipates total capital expenditures to be $125 million–$135 million.
Short Interest in KMI: Reading the Trend
Short interest in KMI is on the lower side of its average of ~2.5% over the past five years.
EPD’s 3Q16 Results: Is a Recovery in Energy Coming Soon?
On the current state of the energy industry, EPD’s CEO Jim Teague said, “We are optimistic that the energy industry has weathered the harshest part of this cycle.”
Here’s What’s Ahead for Oneok Stock in the Short Term
Oneok’s (OKE) 50-day and 200-day moving averages might act as resistance and support, respectively, for the stock in the short term.
Will Enterprise Products Beat Its 3Q15 Consensus Revenue Estimates?
EPD’s revenue estimate for 3Q15 The consensus revenue estimate for Enterprise Products Partners (EPD) for the third quarter of 2015 is $9.1 billion. EPD missed revenue estimates by 20% in the second quarter of 2015. On the other hand, peers Spectra Energy Partners (SEP) and Energy Transfer Partners (ETP) beat 2Q15 revenue estimates by 1.2% […]
Why Kinder Morgan Rose 3% Last Week
Kinder Morgan (KMI) rose 2.9% in the week ended Monday, June 5, 2017, recovering from some of its previous losses.
Acquired Assets Drove Holly Energy Partners’ 4Q15 Earnings Growth
Holly Energy Partners reported its 4Q15 results on February 23, 2016. Its adjusted EBITDA for 4Q15 was $67.4 million, 28% higher than its 4Q14 EBITDA.
What Could Drive Enterprise Products Partners’s Growth?
EPD has $5.3 billion of projects currently under construction that are expected to be operational by the end of 2018.
How ONEOK’s Segments Are Expected to Have Performed in 3Q16
ONEOK (OKE) operates as a pure-play general partner of ONEOK Partners (OKS). To analyze OKE’s earnings levers, we need to look at OKS’s operating segments.
Enterprise Products Is Expected to Increase Distributions in 2015
Enterprise Products trades at a distribution yield of ~4.9%. One of the reasons for EPD’s relatively lower distribution yield might be its distribution coverage ratio.
How Are Midcoast Energy Partners’s Segments Performing?
In 2Q16, the Gathering, Processing, and Transportation segment contributed more than 90% to Midcoast Energy Partners’s (MEP) gross margin.
National Oilwell Varco Had Strong Earnings Growth
Increased global drilling activity and focused cost reduction efforts contributed to National Oilwell Varco’s earnings growth in 2018.
ONEOK Partners Maintains Guidance for 2016
ONEOK Partners expects adjusted EBITDA of $1.9 billion for 2016 and DCF (distributable cash flow) of $1.4 billion for the year.
What Institutional Investors’ Activity in ONEOK Indicates
Nearly 75% of ONEOK’s (OKE) outstanding shares are currently held by more than 800 institutional investors.
Midcoast Energy Partners’s Production Volumes in Focus
So far in 2016, nearly 40% of the gross business margin of Midcoast Energy Partners (MEP) is expected to depend on contracts that have direct exposure to commodity prices.
Magellan Midstream: Analyzing How Its Segments Performed
Magellan Midstream Partners’ (MMP) Refined Products segment, which primarily transports gasoline and diesel, earned 61% of its EBITDA for 2Q17.
Three Analysts Upgraded Helmerich & Payne in September
On September 25, B. Riley FBR raised its rating for Helmerich & Payne from “neutral” to “buy.” B. Riley FBR also raised the target price from $68 to $83.
What to Make of Magellan Midstream Partners’ Segment Performances
Magellan Midstream Partners’ (MMP) operational segments are Refined Products, Crude Oil, and Marine Storage.
USA Compression Partners Beats Peers on Year-to-Date Returns
USA Compression Partners primarily provides natural gas compression services, which are a necessary part of the natural gas production and transportation process.
Why Andeavor Logistics Has Risen 11% in January 2018
Andeavor Logistics (ANDX) has risen 11.0% so far in January 2018. In comparison, Phillips 66 Partners (PSXP) has risen nearly 1.0%.
How Last Week’s Rise in Natural Gas Prices Impacted MLPs
Natural gas prices rose to close at $2.5 per MMBtu on October 9. Natural gas prices had hit a three-year low of $2.45 per MMBtu on October 2.
Hi-Crush Partners Plans to Resume Distributions in 2017
For 3Q17, Hi-Crush Partners expects 14%–24% sequential growth in sand volumes sold. The company also expects frac sand prices to improve.
Which Segment Drives Enterprise Products Partners’ Performance?
NGL Pipelines & Services is EPD’s largest segment. It contributed 54.0% of EPD’s EBITDA in 3Q16 and rose just 1.0% year-over-year.
How CLMT’s Distributions Differ from CVRR’s and ALDW’s
CVR Refining (CVRR) and Alon USA Partners (ALDW) have variable distribution policies.
What to Expect from CVR Refining’s 4Q16 Results
CVR Refining (CVRR) is scheduled to report its 4Q16 results on February 16, 2017. The refining MLP’s performance over the last few quarters had been severely hit by low crack spreads and high RIN costs.
How Plains All American Pipeline’s Segments Could Perform in 1Q16
Plains All American’s Transportation segment contributed ~45% of the total adjusted EBITDA in 4Q15, which was low due to the lower average price per barrel.
Tallgrass Energy Expects 17% Earnings Growth in 2018
Tallgrass Energy’s Natural Gas Transportation segment contributed slightly more than half of the company’s first-quarter EBITDA.
Natural Gas Prices Dipped Last Week: Impact on MLPs
NYMEX (New York Mercantile Exchange) near-month Henry Hub natural gas futures contracts fell last week compared to the previous week.
Dropdowns Fuel Shell Midstream Partners’ Distribution Growth
Shell Midstream Partners declared a quarterly distribution of $0.22 per limited partner unit for 4Q15—an increase of 7.3% over last quarter’s distribution.
How Does ONEOK Partners’s Growth Benefit ONEOK?
At the current ownership level, nearly 70% of every incremental ONEOK Partners (OKS) adjusted EBITDA dollar flows to ONEOK (OKE) as ONEOK Partners distributions.
Inside Plains All American’s Growth Capital Investments
Growth capital Plains All American Pipeline (PAA) plans to spend $ 1.5 billion on growth capital projects in 2016. The company’s pipelines have increased from nearly 16,000 miles in 2009 to more than 18,000 miles in 2015. The above graph shows the historical growth capital investments in the company’s Transportation segment. The segment’s 1Q16 profit […]
Kinder Morgan’s Net Debt Rises $330 Million in 1Q18
Kinder Morgan’s (KMI) net debt was ~$37.0 billion at the end of 1Q18, $331 million higher than at the end of 2017.
What Does Energy Transfer Partners’ Valuation Indicate?
Magellan Midstream Partners has the highest EV-to-EBITDA ratio among the MLPs under consideration.
Why Halliburton’s Valuation Looks Attractive
Halliburton (HAL) is trading at a forward EV-to-EBITDA multiple of ~8.6x—lower than Schlumberger and Baker Hughes’s forward EV-to-EBITDA multiples.
Visa Offers Consistent Revenue Growth
Visa (V) has recorded consistent revenue growth over the last few quarters.
What Might Cap Rising Crude Oil Prices?
The US crude oil (USO) supply includes domestic production and imports. The supply gets consumed as inputs to refineries and exports.
Schlumberger: Analysts Cut the Target Price
On January 10, Jefferies cut its target price for Schlumberger from $54 to $47. Morgan Stanley cut its target price for the stock from $50 to $45.
What Does Rising Natural Gas Production Mean for Energy MLPs?
According to the US EIA (Energy Information Administration), US natural gas production averaged 73.6 Bcf/d (billion cubic feet per day) in 2017.
What Does Kinder Morgan’s Valuation Indicate?
Kinder Morgan (KMI) is currently trading at a forward EV-to-EBITDA multiple of nearly 12.0x.
Will US Gasoline Demand Favor Alon USA Partners?
Refining MLPs such as Alon USA Partners (ALDW) and CVR Refining (CVRR) should benefit if gasoline demand remains strong.
Should You Include Tesoro Logistics in Your Portfolio?
Of the analysts surveyed by Bloomberg, 80% rated Tesoro Logistics as a “buy,” and 20% rated it as a “hold.” No analysts rated it as a “sell.”
How Do CVR Refining’s Operational Metrics Look?
CVR Refining’s (CVRR) Coffeyville and Wynnewood refineries saw a decline in refining margins in 3Q16 compared to the corresponding quarter last year.
What Short Interest in Enterprise Products Partners Stock Means
Low short interest in EPD stock most likely indicates that not many investors expect its price to fall further in the near future.
Major Litigations End, but Bank of America Faces New Challenge
In March, the Fed issued a conditional non-objection to Bank of America’s capital plan. It must resubmit its plan and address certain weaknesses.
ETE, EPD, KMI, and WMB: What the Current Valuations Indicate
Kinder Morgan (KMI) is currently trading at a forward EV-to-EBITDA multiple of nearly 11.4x. This is much lower than its five-year average multiple of nearly 17.4x.
What Does ONEOK’s Leverage Indicate?
For 2016, ONEOK’s (OKE) consolidated debt-to-EBITDA ratio was 5.1x. The company expects the ratio to fall to 4.7x for 2017.
Are Institutional Investors Bullish on HCLP and EMES?
Recently, Morgan Stanley Investment Management, Goldman Sachs, and Bank of America Merrill Lynch bought Emerge Energy Services (EMES) shares totaling nearly 2 million.
Enterprise Products Has Outperformed Its Peers in 2018
So far, Enterprise Products Partners (EPD) has risen ~9% in 2018. The company has outperformed its peers in the midstream sector.
Why Analysts Are Bullish on Energy Transfer Partners
Of the analysts surveyed by Reuters, 86% rated Energy Transfer Partners (ETP) as a “buy, ” and the remaining 24% rated it as a “hold.”
Industrial Capacity Use Slips Again: Will It Hurt US Banks?
A rise in capacity use indicates higher demand for goods, and has been historically associated with higher inflation.
WTI Fell 3%, Closing Below Brent: The Impact on MLPs
NYMEX near-month WTI crude oil futures prices fell 2.8% in the week ended January 1, 2016. WTI crude oil prices closed at $37.04 per barrel on January 1.
More than 70% of the Analysts Rate ONEOK as a ‘Hold’
Of the analysts surveyed by Reuters, 71% rated ONEOK (OKE) as a “hold.” Nearly 23% rated ONEOK as a “buy,” while 6% rated it as a “sell.”
HCLP and EMES: Frac Sand MLPs Fell More than 40% in 2017
Frac-sand MLPs Emerge Energy Services (EMES) and Hi-Crush Partners (HCLP) are down more than 40% so far in 2017. In comparison, Fairmount Santrol Holdings (FMSA) is down 55% and U.S. Silica Holdings (SLCA) is down 39%.
TransCanada, Enbridge: Capital Projects Should Drive Growth
TransCanada’s (TRP) Leach XPress project was placed in service on January 1. On January 2, the company announced that the FERC (Federal Energy Regulatory Commission) had issued a “public convenience and necessity” certificate…
What Drove CVR Energy and CVR Refining’s Q2 2018 Results?
CVR Energy (CVI) and its subsidiary CVR Refining (CVRR) reported their second-quarter results on July 25 after the markets closed.
What Does Institutional Investor Activity in TEP Indicate?
Tortoise Capital Advisors, Alps Advisors, and Salient Capital Advisors are the top three institutional investors in Tallgrass Energy Partners (TEP).
Are Rising Treasury Yields behind the Higher MLP Yields?
The Alerian MLP Index is trading at a yield of ~7.9%, which is ~5% higher than US ten-year Treasury yields.
Must-Know: World’s Top Oil Companies by Production
The US, Saudi Arabia, and Russia are the world’s top three crude oil producers. Let’s take a look at the world’s top oil players by production volumes.
Schlumberger’s Q1 Earnings Are Expected to Fall 21%
Schlumberger (SLB) is scheduled to report its first-quarter earnings on April 18. Analysts’ consensus EPS estimate is $0.3 per share.
Understanding Kinder Morgan’s Gains Last Week
Kinder Morgan (KMI) gained 1.8% last week (ended April 28, 2017), after falling 5.2% the previous week (ended April 21).
US Banking Sector: Key Trends and Outlook
Changes in technology have reshaped the banking sector. Banks are increasingly collaborating with fintech firms to improve their customer service.
An Overview of US LNG Production and Exports
Investors may be seeing a lot of reports about rising US LNG (liquefied natural gas) exports. Let’s review the basics of LNG.