Kinder Passes Midstream’s Stress Test, Who’s Likely to Follow
Recently released Q4 results from some giant oil services providers have flashed a clear warning to investors in US midstream energy companies:There’s a sector-wide stress test in progress, and it’s not likely to let up at least until the second half of 2020.
Endangered Dividends List
EnLink Midstream is cutting its quarterly dividend to 18.75 cents per share starting with the February 13 payment, a roughly 34 percent reduction from the previous 28.3 cents. The company is holding in more cash in response to weaker drilling activity in Oklahoma.
Energy in 2020: By the Sectors
We’re coming to the end of 2019. The good news is, in stark contrast to a year ago, the wind is very much at our back for our energy stocks.
Performance of our Actively Managed Portfolio holdings wasn’t universally positive this year. But as we report in this issue’s Portfolio discussion, the winners appear to have more than offset the notable losers. And despite launching our High Yield Energy List with remarkably poor timing, even the most damaged companies over the year’s first 11 months appear to be finishing strong, with the expectation of better times in 2020.
This is the second of three issues this month highlighting our outlook for what we believe will be a very strong year for energy in 2020. The focus of the first was on the macro, under the title “Oil: Our 2020 Outlook.”
We strongly encourage everyone to read that feature article first, as it explains what we see happening for the commodity and thereby sets the table for what comes next. The feature piece this time is in a discussion format where we highlight our sector-by-sector view for energy stocks, from producers and midstreams to service companies and refiners.
The final issue of this year focuses on individual recommendations and our portfolio strategy. It’s our “game plan” for taking advantage of what we believe will be a strong year for energy stocks in general, but with timing of rallies likely to vary sharply by sector.
Endangered Dividends List
The current EDL features 20 different companies. Four of them are natural resource producers, three Canadian oil and gas and one of them a coal miner. Their primary risk is simply realized selling prices for their products, and their ability to offset pressures with hedging and cost reduction.
Endangered Dividends List
Endangered Dividends List companies are vulnerable for various reasons. This is our look at some of the stock most at risk of dividend cuts as we approach the end of 2019.
Why We’re Buying Enterprise Products Partners Now
The Alerian MLP Infrastructure Index has dropped more than 20 percent since late July. The chief catalyst for the most recent decline: Growing concern that falling North American rig deployment will stall oil and gas production in 2020.
Energy: Solid Earnings But Investors Fear the Future
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.
Endangered Dividends List
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.
Endangered Dividends List
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.
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Live Chat with
Elliott and Roger on Jan. 30, 2020
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
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Elliott H. Gue
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Roger S. Conrad
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor