I would appreciate your input on which stock to buy, LNG or CQP? CQP has been down the past 5 days while LNG continues to up. CQP is the parent company and I suppose the drop is in part due to the ex div date being announced. Still I kinda wish I'd bought LNG instead of CQP. What are the advantages of owning one stock as opposed to the other? Long term of course. Thanks.
Both CQP and LNG offer a good, not great, opportunity for significant capital appreciation in the next 3-4 years. Unfortunately, a lot can happen in 3-4 years, things that nobody anticipates, so there is risk associated. CQP pays you to wait and take the risk while LNG does not.
I am debating between 2 dividend stocks. AGNC and CQP. This morning I am seeing news about CQP that they missed on earnings, yet the stock price is rising. I am leaning toward CQP at a lower price as I think the LNG market will rise in the future. Any thoughts?
Long term I think for ME would be 2015-2016. When LNG would perhaps begin to pay a dividend. I suppose a large part of my basis is dividend based. If I can hold one stock and collect a dividend for 3 years as opposed to none from the other etc...etc... I just mentioned the past 5 days though because the stock that does not pay a Div is going up whilst the one that does is not. Which if that continues (over time) would kill the concept of owning the stock with the dividend. As opposed to the one that does not BUT rises significantly in price. By significantly I mean that I sold my LNG in November at $15 in order to buy shares of CQPas it pays a dividend. BUT since november LNG has gone to $21 plus! So who needs a dividend if your stock is rising? Thus my quandry. I suppose ideally one would own both no?
My response to the CQP or LNG question would be to repeat something I posted on the LNG board:
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?
CQP is not the parent company. LNG is the general partner and holds about 60 percent of the common units of CQP.
Sentiment: Strong Buy
Thanks dlf412 for replying to my post. I had about 1500 shares of LNG but sold them at $15 in november. I took a nice profit but not as nice as if i had held and sold it for like $21! My bad. I was just bothered by the debt, lack of dividend and the secondary offerings, the taxes going up this yeat etc... So anyway I bought a bit of CQP with the profit from LNG at around $19.50. Thinking that it IS nice to get a Dividend while waiting for 2015 and 2016 to come around.
Also thanks for clearing up that LNG is a general partner etc... I'm not sure I understand that dynamic between the two though. What is good for CQP is good for LNG and vice versa? Perhaps they trade autonomously from one another? Regardless your pricing of CQP seems sound, while pricing LNG is anyones guess at this time. LNG seems to be the one moving more though. Whatever the perception for that is, perception is a reality of sorts. :) I mean if someone wants to pay $21 for a stock i own that is worth $17 or less who am I to argue? Having said that it IS another thing for ME to buy it. Based solely on this hot perception of LNG value or eventual value and nothing else. Compared to something more tangibly reality based like the price of CQP.
So given LNG does APPEAR to be overbought I'd add to my position in CQP also. Collect the Dividend and keep an eye on LNG in meantime should the excitement wane a little, along with a drop in price.