If a company wants to bury weak results they will release earnings after the market close on a Friday.
Strong quarter. Maybe maybe CC was moved up because of early tee time or dentist appointment.
Otherwise, Money, it would have been pretty early PDT. Also the detailed earnings announcement will be released an hour or three before the CC, so all pertinent info will be available much earlier than the CC. Seems to me that results will be weak in any case.
First, I confess to being baffled by DPM's doubling in price since its Feb.11th low close of 15.60. Of course that was way low in light of the distribution and cash-flow coverage of 1.19. But when DCP announced that for 2016 the ratio would drop to 1:1 based on (as I regard it) very optimistic energy prices, that gave me pause. Yet the units continued to rocket when I thought that the helium should have been whooshing out of the bullish balloon. I was reminded of Linn Energy, which was paying a recklessly high distribution while trading in the high 30's. as if the hard times to come couldn't possibly occur. But they did. And the units are now at $.38. Also, there are numerous other sad examples.
Now there's a lot that's good to be said about DCP Midstream. But I've gotten uncomfortable about its debt, its 2016 guidance based on unlikely energy prices, the PPS, the sudden bullishness, and (finally to the point) the surge in bond prices. Having bought 85 bonds some weeks back at prices between $69 and $75, I sold them yesterday at $97 plus the accrued daily interest. (I refer to the Duke Energy Field Services bonds which were DCP's prior incarnation.) It was a dandy profit in a very short time, though that wasn't my initial intent. Should the bond prices drop some months from now, I'll consider getting back in again.
Why would they advance the call start time by 1 hour, to market open, on earnings release if they did not want to diffuse some weak results? Did someones(s) have same question/concerns and sold today while many peers advanced?
so, you don't buy "risky" energy companies but are here giving your sage advice? Are you bored without anything to do but go on a comment board and give advice on stocks you don't like and wouldn't own?
Sorry for the late reply. My interest in financial conservatism is in stability. Risk-oriented energy companies implode during hard times, which are cyclical in the energy arena.
dpm on the 19th of april hit a closing pprice of $30.00. that almost makes me whole again,plus distributions are still on track to continue. chenerie energy in the last month has shipped to tankers of lng to foring ports, and has two mor tankers to arrive for loading next month. a small amount of good news for pipe lines that carry lng.
good investing to all
Sentiment: Strong Buy
Oil prices are still at the lower end of the cycle but they're not going to remain low forever. If you have a multi-year investment horizon the MLP sector is compelling. I'm confident MLP unit prices will revert back to their norm on the back of higher energy prices but until then I'm happy to collect distributions.
Also don't forget their hedge, and they planned for this way before anyone else did... DPM will be fine and trade in the mid 20's for the next two years which is fine with me.. the lower the SP the better with a stable dividend.. :)
At this point I think DPM can maintain the distribution without being fiscally irresponsible...oil today is at $40 and financially devastated OPEC members and Russia are meeting in Doha next month to try and get price relief...think $50/barrel and later this year demand for ethane and propane go up significantly because of exports..as noted in the CC ethane demand jumps 500,000 barrels/day next year because of crackers switching from naptha to ethane.. Add in either a wet summer requiring lots of propane to dry grains or a normal winter or both, and DPM's projections will be met and perhaps exceeded. And when your unit price is as distressed as DPM's you need confidence not distress at this point. And if DPM cuts the distribution and plunges back into the teens you think that Spectra and Philips are going to like explaining the loss of confidence in DPM? I don't think so. Net sult IMO is that the distribution will be held constant for the next two years at least. After that I expect it to rise.....
ron, you are certainly not talking in favor of long term investors. I mean the ones who paid in the high 30's and low forties. ther dividends are not near as higjh as you must be referring to. mine is 9% and is one of my best dividend buys. go to another stock to practice your conservatism. whats your interest in calling for a reduction of the dividend. inquiring minds wants to know
It would certainly be a prudent move for DPM to drop its distribution to $.50 or even a bit lower. With rose-colored glasses firmly glued to their noses, even then the company's projected DCF is "approximately one times coverage." I suppose it's asking too much for them to be financially conservative, as if the severely punished energy companies that haven't been so offer no lessons to be learned.
I'm not sure what that means except when someone says "they''ll be fine" it is very subjective.
Here is the quote from the CC.:
Let me highlight DPM's 2016 guidance. Based on a price deck of $45 crude, $0.42 per gallon NGL and $2.50 natural gas, our 2016 target-adjusted EBITDA range is $565 million to $595 million and our DCF range is $465 million to $495 million. We assume a flat distribution to 2015 of $3.12, resulting in an approximately one times coverage ratio.
If you go to the CC transcript, they did say they'll be fine in 2016 "at the current screen," that was a few weeks ago, and those were pretty low prices. They are a confident bunch for sure.
Sentiment: Strong Buy