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Cheniere Energy, Inc. Message Board

  • dlf412 dlf412 Feb 1, 2013 11:15 AM Flag

    Question for LNG investors

    How do Cheniere Energy Inc (LNG) investors decide what is a reasonable share price?

    I am a CQP investor and its distributions give me a basis for this decision. If I want a yield of at least 6 percent, the current annual distribution of $1.70 equates to a share price of about $28. Cheniere estimates that the CQP distribution will be about $3.10 when trains 1-4 are operational, which equates to a price of about $50. That being the case, I think that over the next few years, CQP should work its way up to about that price, slowly for the first year or two, then fairly rapidly. So I think it makes sense to invest in CQP now, getting a yield of about 7 percent along with the capital gains.

    LNG does not currently pay a dividend, but has stated that they anticipate a $2 dividend in 2016. How do investors decide what is a fair price for LNG now? Of course, another question would be why invest in LNG rather than in CQP?

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