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Antero Midstream (AM) Announces Fourth-Quarter Dividend Hike

Zacks Equity Research

Antero Midstream Partners LP AM recently announced that the board of directors of its general partner has given approval to hike quarterly cash distribution.

The fourth-quarter 2018 distribution of 47 cents per common unit, which will be paid to unit holders of record, represents a year-over-year and sequential hike of 29% and 7%, respectively. With the increase in quarterly distribution, the partnership has set the record of rising distributions for 16 straight quarters. The latest hike translates to an annualized distribution of $1.88 per unit.

The hiked distribution is expected to be paid out on Feb 13, 2019, to unitholders of record as of Feb 1, 2019. This consistent distribution hike reflects Antero Midstream’s strong and stable operations, backed by long-term midstream energy services contracts with its parent Antero Resources Corporation AR.

Notably, Antero Midstream has a long history of successful execution of growth projects. Over the 2018-2022 period, the partnership estimated its organic midstream project backlog at $2.7 billion. Of the total project value, 83% is expected to be concentrated in the Marcellus while the remaining 17% will be in Utica. These projects are likely to help the partnership reach the target of generating distribution growth of 28-30% from 2018 to 2020. Moreover, Antero Midstream projects 20% distribution growth in 2021 and 2022, each.

Antero Midstream GP LP AMGP, which owns the general partner of Antero Midstream, also announced a distribution hike. It has decided to increase distribution to 16.4 cents (65.6 cents on an annualized basis), reflecting a 119% year-over-year rise and 14% sequential jump. This marks Antero Midstream GP’s distribution ascent for six successive quarters. The hiked distribution is expected to be paid out on Feb 21, 2019, to unitholders of record as of Feb 1, 2019.

Price Performance

Antero Midstream has lost 23.8% in the past year compared with the 13.6% collective decline of the industry it belongs to.



Zacks Rank & A Stock to Consider

The partnership currently carries a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for a better-ranked stock as given below:

Houston, TX-based Shell Midstream Partners, L.P. SHLX is a midstream energy company. For 2019, its bottom line, which has witnessed three upside revisions over the past 60 days, is expected to grow 27.7% year over year. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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