North American midstream gas sector prepares Q1 earnings amid demand recovery spglobal.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from spglobal.com Daily Mail and Mail on Sunday newspapers.
Author Bio
Matthew is a senior energy and materials specialist with The Motley Fool. He graduated from Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries: Follow @matthewdilallo
The stock market has seems to be hitting a new all-time high almost daily. That s causing some concern that it might be a bit overvalued after a big run-up in the past year. However, there always seem to be some hidden gems out there for investors willing to go digging.
3 Cheap Energy Stocks to Buy Right Now fool.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from fool.com Daily Mail and Mail on Sunday newspapers.
Author Bio
I love looking at the story behind investments from an interdisciplinary point of view, with an equal appetite for high-growth disruptors and beaten-down value names.
What happened
Shares of
Crestwood Equity Partners (NYSE:CEQP) rose 27.2% in March, according to data provided by S&P Global Market Intelligence. As part of the energy sector, Crestwood has risen with oil prices as the global economy looks forward to reopening. In addition, Crestwood announced a transaction toward the end of the month in which it would buy out a large unitholder while also increasing its 2021 guidance.
Image source: Getty Images.
So what
A high yield for a cheap price
Crestwood Equity Partners is a master limited partnership (MLP) that operates primarily fee-based midstream infrastructure. That business model generates lots of recurring cash flow that is relatively immune to fluctuations in energy prices and volumes. That was evident last year as Crestwood grew its earnings by 10% despite all the turbulence in the energy market.
Image source: Getty Images.
The company expects even better results in 2021, fueled by stronger-than-expected energy market conditions and a recent string of strategic transactions. Those factors have the company on track to generate enough cash flow to cover its big-time dividend which currently yields 9.2% by two times. That will leave it with enough excess cash to finance its capital projects with about $130 million to $180 million left over for debt reduction and repurchasing additional equity.