THIS MONTH’S ISSUE
Wake Up: Energy is a Growth Business
We’re entering a busy time of year here at Energy & Income Advisor. It’s quarterly earnings season, a time when we listen to earnings calls from dozens of energy companies – producers, refiners, midstream energy firms, services companies, and supermajors like Exxon Mobil (NYSE: XOM) to name just a few. For me at least, quarterly earnings unofficially season kicks off with SLB (NYSE: SLB) – a company I just can’t quite seem to stop calling Schlumberger at conferences and on interviews – which is due to report this year on April 19th before the market open (that’s this Friday). My typical routine is to create a list of stocks I’m watching closely each quarter, usually a mix of names I always follow closely like SLB and some other watchlist stocks I follow more casually. And, for the producers, I typically create a basic cash flow model of capital spending, costs and production to derive a rough valuation target. I also usually catch up on any Wall Street research out there, comparing the consensus models and forecasts to my own. In doing that work this quarter it struck me that I, like most analysts who follow the sector, have taken to...
Live Chat
with Elliott Gue and Roger ConradOn 04/30/2024
Portfolio Strategy: Good News from Our Last Reporters
Q4 and full year financial filings are always far more complex than quarterly results. Smaller companies especially need more time to complete them. So it’s no surprise the data we receive as investors is always stretched out, with CrossAmerica Partners LP (NYSE: CAPL) and ONEOK Inc (NYSE: OKE) the last two Model Portfolio and High Yield Energy List members to report this time. The good news is both had the solid numbers and guidance needed to remain recommended companies. For investors in High Yield Energy list member CrossAmerica, the high dividend is the primary driver of returns. And with no increases...
Endangered Dividends List
Endangered Dividends List companies are vulnerable for one or more of the following reasons: Cash flow coverage of distributions is inadequate. Elevated debt levels with imminent refinancing needs. Revenue pressure triggered by weakness for at least one key asset. Inability to access the equity market on favorable terms to fund capital spending, forcing management to utilize more internally generated cash flow. Exposure to volatility in commodity margins from either rising or falling prices of raw materials. Aggressive general partners anxious to buy in limited partners’ cash flows at discounted prices. Regulatory reversals. Expiring contracts with little hope for renewals at...
Producers Buying Midstream–What It Means for Energy M&A
Since the peak of the previous energy price cycle in 2013-14, there have been 61 acquisitions of publicly traded North American midstream companies. That’s in addition to dozens of deals involving private capital and consolidation from ownership of assets changing hands, including this week’s purchase of Utica Shale midstream assets by MPLX LP (NYSE: MPLX from Summit Midstream Partners (NYSE: SMLP). At this time, two more purchases of whole midstream companies are pending and likely to close the next few months. Energy Transfer LP (NYSE: ET) affiliate Sunoco LP (NYSE: SUN) is buying NuStar LP (NYSE: NS), and EQT Corp...
Meet Our Editors
Elliott H. Gue
Founder and Chief Analyst
Since earning his bachelor’s and master’s degrees from the University of London, Elliott has dedicated himself to learning the ins and outs of this dynamic sector, scouring trade magazines, attending industry conferences, touring facilities and meeting with management teams.
Roger S. Conrad
Founder and Chief Analyst
Roger S. Conrad has successfully advised income investors since the 1980s, with a nationally acclaimed sector specialty in utilities, telecommunications and energy. He’s a managing partner of Capitalist Times author of Power Hungry, independent director of NYSE-listed Miller Howard High Income Equity Fund and contributing editor to Forbes.com.
