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Here's What Makes DCP Midstream (DCP) an Attractive Bet Now

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Zacks Equity Research
·3 min read
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DCP Midstream, LP DCP stock looks like a lucrative investment pick at the moment. We are positive about the partnership’s prospects and believe that it is the right time for you to add the stock to your portfolio.

Headquartered in Denver, CO, the partnership is among the leading processors of natural gas in the United States. It is also one of the largest producers and marketers of natural gas liquids (NGLs) in the domestic market. The partnership’s daily gas processing capacity is more than six trillion British thermal units of gas. With the processing of the raw gas, the partnership is capable of producing roughly 400,000 barrels per day of NGLs.

The partnership then transports the produced NGL to premium Gulf Coast petrochemical and energy markets through its huge network of pipeline, spreading across more than 4,500 miles. By connecting its gathering and processing regions with key markets, the partnership has become a leading operator of NGL pipeline in America.

Investors should know that DCP Midstream generates handsome fee-based margins from its diversified portfolio of downstream assets, comprising NGL pipelines, fractionators along with NGL storage facilities. Also, the stock has rallied 197.5% quarter to date, when most of the energy players are struggling to survive the coronavirus pandemic.

Considering the above factors, it should not come as a surprise that DCP Midstream carries a Zacks Rank #2 (Buy) along with a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Other prospective players in the energy sector are Murphy USA Inc MUSA, Key Energy Services, Inc. KEGX and CNX Resources Corporation CNX. While Murphy and Key Energy sport a Zacks Rank #1, CNX Resources carries a Zacks Rank #2.

Murphy USA is likely to see earnings growth of 7% in the next five years.

Key Energy is expected to witness bottom-line growth of 97.2% in 2020.

CNX Resources has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.

Zacks Top 10 Stocks for 2020

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CNX Resources Corporation. (CNX) : Free Stock Analysis Report
 
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
 
Key Energy Services, Inc. (KEGX) : Free Stock Analysis Report
 
DCP Midstream Partners, LP (DCP) : Free Stock Analysis Report
 
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Zacks Investment Research