Spectra Energy Corp

Takeaway capacity in Appalachia As we’ve learned so far in this series, rising natural gas production in the Appalachian region has created the need for new midstream infrastructure, including natural gas processing plants (see the previous article) and pipelines. Several new pipeline projects are being developed to increase takeaway capacities from the Marcellus and Utica supply […]

Of the analysts covering DCP Midstream, 67% rate it as a “hold,” 22% rate it as a “buy,” and the remaining 11% rate it as a “sell.”

DCP Midstream’s EV-to-adjusted EBITDA ratio using a trailing 12-month adjusted EBITDA is 13.0x.

WMB’s valuation has picked up since the merger termination with Energy Transfer Equity (ETE) and a few key announcements in recent months.

Williams Companies (WMB) has underperformed the sector index, the Alerian MLP Index, over the past three years in terms of total returns.

On January 27, 2017, Midcoast Energy Partners (MEP) announced an agreement with Enbridge Energy (EECI), an indirect wholly-owned subsidiary of Enbridge (ENB).

Enbridge Energy Partners (EEP) expects 2017 adjusted EBITDA to be lower than its 2016 estimated adjusted EBITDA.

Oneok (OKE), the midstream C corporation GP (general partner) of Oneok Partners (OKS), was downgraded by Jefferies from “hold” to “underperform.”

Of the analysts that cover DCP Midstream, 71.0% rate it as a “hold,” 12.0% rate it as a “buy,” and the remaining 18.0% rate it as a “sell.”

DCP Midstream Partners (DPM) is expected to keep its distributions flat for all of 2017, even after the simplification transaction.

DCP Midstream Partners (DPM) and DCP Midstream LLC announced a simplification of their organizational structures. The combined partnership would have an enterprise value of ~$11 billion.

Energy Transfer Partners (ETP) has agreed to merge into Sunoco Logistics Partners (SXL) in an all-stock deal.

PAA’s Transportation segment contributed ~57% to its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) in 2Q16.

Enbridge’s (ENB) acquisition of Spectra Energy (SE) offers diversification benefits to Enbridge by expanding into SE’s natural gas business.

On September 6, 2016, Enbridge (ENB) and Spectra Energy (SE) announced a stock-for-stock merger agreement, which values Spectra Energy common stock at $28 billion.

Spectra Energy’s debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio of 6.8x ratio remained stable in 2Q16 compared to 1Q16.

Spectra Energy’s (SE) Texas Eastern Transmission system connects Texas and the Gulf Coast with markets in the northeastern United States.

DCP Midstream Partners (DPM) has risen 40.6% YTD (year-to-date) despite touching a multiyear low in the beginning of 2016.

Of the analysts surveyed by Bloomberg, 39% rate Spectra Energy (SE) as a “buy,” and 55.5% rate the stock as a “hold.” Only 5.5% rate it as a “sell.”

In this article, we’ll look at what Wall Street analysts recommend for DCP Midstream Partners (DPM).

ONEOK (OKE) and ONEOK Partners (OKS) are scheduled to report their 2Q16 results on August 2. Here’s what you need to know.

Spectra Energy (SE) has risen 27% since the start of 2016. Will this improvement last?

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.

SEP’s 4Q15 EBITDA growth mainly came from expansion projects in its natural gas transmission business. These projects should continue to contribute to the segment’s EBITDA in 1Q16.

ONEOK (OKE) and ONEOK Partners (OKS) are scheduled to report their 1Q16 results on May 3, 2016.

Integrated utility holding company Eversource Energy (ES) is planning to sell 1,200 megawatts of its generation business in the next two years.

In 2015, non-utility operations contributed nearly 40% to DTE Energy’s (DTE) operating revenues. This is expected to increase due to DTE’s aggressive focus on its midstream segment.

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.

Kinder Morgan (KMI) is the largest company in the peer group by enterprise value (or EV).

Compared to crude oil, natural gas prices seem to have a lesser impact on the selected midstream stock prices, even though many of them have significant natural gas operations.

On February 8, Spectra Energy’s 20-day moving average crossed above its 100-day moving average, reflecting a strong rising trend in the stock.

Last week’s API report showed that the US crude oil inventory had risen by 7.1 MMbbls (million barrels) for the week ending February 19, 2016.

On February 24, 2016, the EIA (U.S. Energy Information Administration) reported that the US distillate inventory fell by 1.7 MMbbls (million barrels) to 160.7 MMbbls for the week ending February 19, 2016.

The EIA reported that the US crude oil inventory rose by 3.5 MMbbls (million barrels) to 507.6 MMbbls for the week ending February 19, 2016.

Of analysts surveyed by Bloomberg, 40% rated ONEOK (OKE) a “buy,” 47% rated it a “hold,” and 13% rated it a “sell.” The consensus target price for ONEOK in one year is $28.10.

ONEOK Partners’ (OKS) EBITDA growth in 4Q15 was driven by increased NGL (natural gas liquids) gathering and fractionating volumes from recently connected natural gas processing plants.

The API crude oil inventory rose for the fourth consecutive week. The rising crude oil inventory will continue to put pressure on crude oil prices.

Non-OPEC unplanned supply disruptions are expected to average around 0.4 MMbpd in January 2016. They averaged almost 0.4 MMbpd in 2015.

US investments in mining and exploration fell by 35% in 2015. Barclays estimates that investments will fall by 15% in 2016. It fell by 23% in 2015.

The EIA reported that Cushing crude oil stocks rose by 523,000 barrels to 64.7 MMbbls for the week ending February 5, 2016—the highest number since April 2004.

On February 9, 2016, the API published its weekly crude oil inventory report. API crude oil inventory rose for the fourth straight week.

Midstream companies are trading well below their 20-day moving averages except for Kinder Morgan and Spectra Energy Partners.

Of the analysts surveyed by Bloomberg, 46.7% rate Spectra Energy (SE) as a “buy” and 46.7% rate the stock a “hold.” Only 6.6% rate it a “sell.”

On January 5, 2016, Spectra Energy increased its quarterly dividends from $0.37 per share to $0.41 per share—a quarter-over-quarter rise of 9.5%.

The midstream Kinder Morgan trades 39% below its 100-day moving average. During the last rate hike in December 2015, KMI traded in the range of $15 to $16.

As of January 26, midstream giants Kinder Morgan and Williams Companies were trading 36.2% and 40.1%, respectively, below their 100-day moving averages.

About 46% of the analysts surveyed have rated Plains All American a “buy,” while 50% have rated it a “hold,” and 4% have rated it a “sell.”

About 70% of the analysts surveyed have rated MPLX a “buy,” while 30% have rated it a “hold.” None of the analysts have rated it a “sell.”

The total debt for Williams Companies (WMB) and Energy Transfer Equity (ETE) grew by 87% and 32%, respectively, on a YoY (year-over-year) basis in fiscal 3Q15.

Spectra Energy Partners’ debt-to-equity ratio has remained below 1 over the last two years. A ratio of below 1 is considered pretty conservative for MLPs.

Spectra Energy Partners manages its business through its US Transmission and Liquids segments. Its US Transmission segment contributes nearly 85% of EBITDA.

Spectra Energy Partners’ distributable cash-flows for the nine months ended September 30, 2015, are $945 million.

Columbia Pipeline Group has reaffirmed its 2015 targets in its 2Q15 and 3Q15 earnings releases—its only earnings releases since separating from NiSource.

Despite an expected dividend growth close to the peer average, ONEOK has a higher forward yield compared to the average for its peers.

Despite a decrease in the last two quarters, ONEOK’s (OKE) debt-to-equity ratio is still 2.2x. It had a total outstanding debt of $8.7 billion at the end of 3Q15.

ONEOK’s cash flow available for dividends for the nine months ended September 30, 2015, is $474.7 million. So it’s on track to meet its guidance for cash flow available for dividends.

Williams Companies has the highest consensus forward EV-to-EBITDA multiple of 13.0x among its peers.

One factor impacting Spectra Energy’s stock price is the value of the Canadian dollar. Nearly 60% of SE’s 2014 revenues came from its Canadian operations.

Spectra Energy (SE) is trading at a high yield compared to its historical average. However, the stock is trading at a low yield compared to its peers.

Spectra Energy (SE) currently trades at a forward dividend yield of 5.6%. This is high compared to its three-year average dividend yield of 4.3%.

Spectra Energy’s distributable cash flow for 3Q15 was $223 million, compared with $236 million in 3Q14.

SE carries out operations through four segments: Spectra Energy Partners, Distribution, Western Canada Transmission & Processing, and Field Services.

Spectra Energy’s performance in 2015 up to the third quarter is in-line with the guidance for the year provided in the company’s February analyst meeting.

Spectra Energy has generally been trading below its 50-day moving average since mid-2014, when energy prices began falling.

According to Wall Street analysts’ estimates, Kinder Morgan’s dividend is expected to grow 3.7% quarter-over-quarter in 3Q15 and ~15% year-over-year.

Wall Street analysts’ 3Q15 consensus EPS estimate for Kinder Morgan (KMI) is ~$0.186, similar to the ~$0.188 they estimated in the previous quarter.

Kinder Morgan’s 2Q15 revenue estimate was ~$4.0 billion while the 3Q15 estimate is ~$3.8 billion, a decrease of ~4.8%.

What should fixed income investors do today? Generally, widening spreads provide a buying opportunity for investors, because spreads widen when yield of a security rises.

Spectra Energy Partners (SEP) was the best performer among midstream MLPs at the end of trading on Wednesday, August 5. It rose 1.54%.

According to data from the U.S. Energy Information Administration, US crude production dropped to 9.4 million barrels per day in the week ended July 24.

The storage and transportation subsector within XLE rose by 0.66% during the week. Spectra Energy (SE) and Kinder Morgan (KMI) were the best and worst performers, respectively, in this subsector.

Kinder Morgan (KMI) beat analysts’ 1Q15 earnings per share estimate, but Wall Street lowered its 2Q15 estimate to $0.191 compared to $0.216 in 1Q15. That’s a decrease of 11.6%.

Kinder Morgan expects higher oil and gas prices in 2015. Its crude oil and natural gas estimates are 27% and 47% higher than current prices, respectively.

In 1Q15, Kinder Morgan’s 1Q15 revenues decreased 11% to $3.59 billion, from $4.04 billion in 1Q14.

During 4Q14, Magnetar purchased around 1.4 million shares in Devon Energy (DVN). The position represented 1.61% of the fund’s portfolio.

DCP Midstream’s 4Q14 earnings fell short of estimates by 6% in adjusted revenues. But adjusted revenues exceeded consensus revenues by 3% in ten quarters.

In 4Q14, Sunoco’s adjusted revenues fell short of estimates by ~19%.

In this article, we’ll discuss the various capital projects that Kinder Morgan has in the medium term.

In 2015, Kinder Morgan (KMI) has put in place a strong project pipeline that can increase capex by 21% to ~$4.4 billion.

Kinder Morgan’s CO2 segment will stay exposed to commodity price sensitivity, as it is covered by short-term contracts.

Kinder Morgan (KMI) released its financial information for 4Q14 and full-year 2014 on January 21, 2015.

In this article, we’ll discuss Kinder Morgan’s CO2 segment’s operating performance.

Kinder Morgan (KMI) is one of the largest independent operators of liquids terminals in the US. Its terminals are located throughout the US and in some parts of Canada.

Kinder Morgan (KMI), a Houston-based energy company, is one of the largest midstream operators and energy infrastructure companies in the United States.

From 4Q13 to 4Q14, EBITDA jumped for Spectra Energy Partners and the Western Canada Transmission & Processing segments. But, Field Services recorded a loss.

Higher debt-to-equity ratios indicate increased risk associated with the management of debt levels. Spectra Energy has a higher ratio than others.

Spectra Energy’s Western Canada segment saw volume increase ~20% in 2014 over the previous year. In 4Q14, volume increased 14% over 3Q14.

Spectra Energy 4Q14 adjusted earnings beat estimates by 46%. On average, adjusted EPS has exceeded consensus EPS by ~9% in the past ten quarters.

Spectra Energy Corporation (SE), a Texas-based midstream energy company, primarily deals in natural gas gathering and processing.

Companies in the midstream sector that are included in the XLE portfolio include Kinder Morgan, Oneok, the Williams Company, and Spectra Energy.

The Midstream segment has been PSX’s most consistent performer since 2013. From 4Q13 to 4Q14, weighted average NGL prices decreased ~31%.

A drop in crude oil price reduces upstream oil companies’ revenues. Some companies have reduced their capex (capital expenditures) budgets in response.

Between 2013 and 2020, Spectra Energy plans to invest in growth projects worth $35 billion.

Spectra Energy’s earnings increased due to expansion projects and higher crude oil transportation revenues.

DCP Midstream operates Spectra Energy’s Field Services segment, which operates in conventional and unconventional natural gas producing regions.

In this section, we’ll look into the company’s assets in the distribution and western Canada transmission & processing segments.

Spectra Energy is a Texas-based midstream energy company that deals in natural gas gathering and processing, transmission and storage, and distribution.

The NGL Pipelines & Services segment’s revenues fell 4.8% to $4.02 billion in 3Q14—from $4.23 billion recorded last year. However, operating profit increased 11.3% to $711.5 million.

Midstream’s earnings recovery in year-to-date 2014 was aided by higher natural gas liquids (NGL) prices.

WMB’s LTM debt to EBITDA is one of the highest in the group because it has the lowest EBITDA. It also has one of the highest debt levels. This is a concern for investors.