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Energy: Solid Earnings But Investors Fear the Future

By  Roger S. Conrad
Issue No.160 . Nov. 24, 2019

Q3 results and guidance updates are all in for the Actively Managed Portfolio and High Yield Energy List, as well as for most of our coverage universes.

We’re still assessing how results affect our company-by-company outlook for the rest of the year and into 2020. But there are already a few clear takeaways.

First, our recommendations’ Q3 numbers were quite solid, including companies whose shares have taken hard hits lately. And they support guidance for capital spending, distribution policies and balance sheet strength.

That’s by no means true of every energy company we track, and there are plenty of disaster stories shaping up in our coverage universes. But our long-standing thesis is still very much intact: This is a much more sustainable and resilient industry than it was five years ago at the start of the decline.

Energy Commentary >>

Subscribers Only >>

  • Q3 Earnings Roundup - Key Lessons and Where We Go From Here

    By Elliott H. Gue on Nov. 24, 2019

    In the midstream business, companies’ results are being affected very differently by the cutback in drilling rig deployment. Investors are treating sector companies almost as though the blow will fall equally hard on all of them. And MLPs especially can’t catch a break, almost no matter what they report. But the truth is there were very wide differences in the trends behind numbers reported by midstream companies in Q3. And that gap is likely to widen going forward.

  • Endangered Dividends List

    By Roger S. Conrad on Nov. 24, 2019

    Ensign Energy Services (TSX: ESI, OTC: ESVIF) was the only company in our EIA coverage universes to announce a dividend cut since the November 1 issue went to post. The Canada-based drilling and services company reduced its quarterly payout by 50 percent to 6 cents a share from the previous rate of 12 cents.

  • Diving Deep into Oilfield Services – Getting Stronger Overseas

    By Elliott H. Gue on Nov. 1, 2019

    One of the most important lessons to learn about earnings season is that the market’s reaction to the news can be more important than the news itself.

    In other words, if a company reports weak earnings and issues cautious guidance for the quarter ahead; yet, the stock rallies, that’s a sign that market expectations were already low, and the bad news was priced into the stock before it released earnings results.

  • Endangered Dividends List

    By Roger S. Conrad on Nov. 1, 2019

    There have been no dividend cuts announced in our energy stock coverage universes since the previous issue of Energy and Income Advisor. Three companies, however, halted what had been consistent quarterly distribution growth.

  • MLP Conversions and Rollup Q&A

    By Elliott H. Gue on Oct. 17, 2019

    Is the Hess Midstream Partners (NYSE: HESM) transaction a good deal for unitholders, or should we take this opportunity to cut and run before there’s real damage? We think the positives outweigh the negatives of this deal. With Hess Midstream converting to a corporation, those who hold it outside of an IRA will probably pay higher taxes on distributions going forward. 
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  • Live Chat with

    Elliott and Roger on Nov. 26, 2019

    • Portfolios & Ratings

    • Model Portfolios

      Balanced portfolios of energy stocks for aggressive and conservative investors.

    • Producers and Drillers

      Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.

    • MLPs and Midstream

      Our assessment of every energy-related master limited partnership.

    • International Coverage

      Roger Conrad’s coverage of more than 70 dividend-paying energy names.

    Experts

    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor