EQT Midstream Partners
This company has remained a top midstream play across Wall Street. EQT Midstream Partners L.P. (NYSE: EQM) is a growth-oriented partnership formed by EQT Corporation to own, operate, acquire and develop midstream assets in the Appalachian Basin. The partnership provides midstream services to EQT and third-party companies through its strategically located transmission, storage and gathering systems that service the Marcellus and Utica regions. The partnership also owns 700 miles and operates an additional 200 miles of FERC-regulated interstate pipelines. It also owns more than 1,600 miles of high- and low-pressure gathering lines.
The company had a secondary offering late last year that some thought was ill-timed and dilutive, especially since the stock was down about 15% at the time. The bottom line is at least the company was able to go to the capital market for additional funding and should be set for the foreseeable future. Deutsche Bank tem points out the numerous positives for the company, in addition to the fact that the shares have lacked some of the big moves other companies have made this year.
EQT investors are paid a 3.89% distribution. The consensus price target is $92.46. Shares closed most recently at $76.60.
This company has reported very solid numbers and it may be more off the radar for some investors. MPLX L.P. (NASDAQ: MPLX) is a diversified, growth-oriented MLP formed in 2012 by Marathon Petroleum to own, operate, develop and acquire midstream energy infrastructure assets. It is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids; and the transportation and storage of crude oil and refined petroleum products.
The company made a very well-timed and strategic purchase of MarkWest Energy last year for approximately $1.28 billion. The deal combined MarkWest, the second-largest processor of natural gas in the United States and largest processor and fractionator in the Marcellus and Utica shale plays, with MPLX. The combination created one of the largest MLPs, which is expected to generate a mid-20% compound annual distribution growth rate through 2019.
The company recently completed a massive $1 billion private placement that brings liquidity to the balance sheet. The funds will be used for capital expenditures, repayment of debt and general partnership purposes. MPLX had previously announced that the combination of some opportunistic equity issuances in the first quarter, and this private placement would provide for the partnership’s anticipated funding needs for the remainder of 2016 and into 2017.
MPLX unitholders receive a 6.07% distribution. The consensus price target is set at $36.50. Shares closed most recently at $33.29.
While the big money for this year has probably been made, investors looking to initiate or add to energy holdings may want to buy partial positions at current levels, and see if the markets don’t back up some as we head into what could be a very volatile summer.