|Bid||0.000 x 800|
|Ask||0.000 x 306100|
|Day's Range||10.990 - 11.110|
|52 Week Range||9.010 - 11.890|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.85%|
On August 9–16, the major energy ETFs had the following correlations with US crude oil September futures: the Energy Select Sector SPDR ETF (XLE): 96.3% the VanEck Vectors Oil Services ETF (OIH): 95.2% the SPDR S&P Oil & Gas Exploration & Production ETF (XOP): 91.9% the Alerian MLP ETF (AMLP): 63.6%
MLPs are one of the top-yielding sectors among the broader markets. Currently, Energy Transfer Equity (ETE) is trading at a distribution yield of ~7%. Its distribution yield is currently higher than its five-year average. Energy Transfer Partners (ETP) is presently trading at a distribution yield of 10.2%. In comparison, the Alerian MLP ETF (AMLP) is currently offering a distribution yield of 7.4%.
Energy Transfer Equity (ETE) stock has fallen ~8% in the last week. It’s currently trading at $17.41, which is 1% below its 50-day moving average and 3% above its 200-day moving average. ETE stock has rallied more than 36% from its 52-week low of $12.80 in March.
After sailing through rough seas for the past few years, Energy Transfer Equity (ETE) seems to have attractive prospects going forward. Its pending consolidation with Energy Transfer Partners (ETP), robust growth in Q2 2018 earnings, and upcoming projects paint a nice picture for the near future.
MLPs’ strong earnings growth continued in the second quarter after a solid first quarter. Of the top 15 limited partnerships by market cap, 13 reported YoY (year-over-year) rises in their quarterly revenues and earnings. Cheniere Energy Partners (CQP) reported the highest YoY EBITDA growth among the MLPs under review. Fourteen of the top 15 MLPs are constituents of the Alerian MLP ETF (AMLP).
Between August 2 and August 9, the major energy ETFs had the following correlation readings with US crude oil September futures: the SPDR S&P Oil & Gas Exploration & Production ETF (XOP): 82.9% the Energy Select Sector SPDR ETF (XLE): 59.1% the VanEck Vectors Oil Services ETF (OIH): 7.2% the Alerian MLP ETF (AMLP): -38.5%
Cheniere Energy (LNG) reported its second-quarter earnings before the market opened today. The company missed Wall Street estimates in the second quarter of 2018 after five consecutive quarters of beating expectations. Cheniere Energy posted 24.3% YoY revenue growth during Q2, while analysts were expecting a 34.9% YoY revenue increase. The company also missed on the EBITDA and EPS (earnings per share) front. The consensus EPS estimate was $0.25 per share for the quarter, while the company reported an EPS loss of $0.07 per share.
The Alerian MLP ETF (NYSE Arca: AMLP) declared its third quarter 2018 distribution of $0.2066 on Wednesday, August 8th. The dividend is payable on August 16, 2018 to shareholders of record on August 10, 2018. ALPS Portfolio Solutions Distributor, Inc. is also the distributor for the Alerian Energy Infrastructure ETF and the ALPS|Alerian Energy Infrastructure Portfolio.
MLPs’ strong positive momentum continued. The Alerian MLP Index (^AMZ), which includes 44 energy MLPs, ended in the green for five consecutive weeks. AMZ rose 4.0% last week and ended at 285.5—the highest weekly gains in the last seven months. Out of the total 93 MLPs, 55 ended in the green, seven remained unchanged, and 31 ended in the red last week.
Cheniere Energy (LNG) has been weak in recent trading sessions. The US LNG exporter has lost ~8.5% from its 52-week high. Cheniere Energy reached a new 52-week high of $68.7 on June 22 due to the announcement of the final investment decision on Train 3 at Corpus Christi, the simplification transaction with Cheniere Energy LP Holdings (CQH), and gains in global LNG (liquefied natural gas) prices. However, Cheniere Energy came off sharply from its 52-week high amid a stake sale by activist investor Carl Icahn and the rise in trade war tensions between the US and China.
Kinder Morgan (KMI) stock fell 1.6% in the week ending August 3. In comparison, ONEOK (OKE) fell 3.7% and Enterprise Products Partners (EPD) fell 0.5% during the week. The Energy Select Sector SPDR ETF (XLE) fell 1.8% for the week. Crude oil prices fell 0.3%. Read Fed and Trade Wars: What Else Could Impact Crude Oil Prices? to learn more.
In the week ended yesterday, major energy ETFs’ correlation with US crude oil September futures was as follows: The SPDR S&P Oil & Gas Exploration & Production ETF’s (XOP) was 75%. The Alerian MLP ETF’s (AMLP) was 66.1%. The Energy Select Sector SPDR ETF’s (XLE) was 55.1%. The VanEck Vectors Oil Services ETF’s (OIH) was 25.9%.
The much-anticipated merger in the midstream energy space was finally announced late on August 1. Energy Transfer Partners (ETP) has agreed to merge with the wholly owned subsidiary of Energy Transfer Equity (ETE) in an all-stock deal. In its first-quarter earnings call, Energy Transfer Equity told investors that it has been exploring options to simplify its ownership structure.
Williams Companies (WMB) and its MLP subsidiary, Williams Partners (WPZ), reported their second-quarter earnings on August 1 after the market closed. Williams Partners reported an adjusted EBITDA of $1.097 billion in the second quarter—compared to $1,104 billion in the second quarter of 2017, which represents a marginal decline of 0.6% year-over-year. The partnership’s EBITDA fell short of analysts’ estimates of $1.115 billion by ~$18 million (or 1.6%).
July has been kind to the U.S. stock market even amid escalating trade tensions and rounds of tech sell-off. Dow Jones recorded the largest monthly gain of 4.7% since January while the S&P 500 and the Nasdaq Composite Index logged in the fourth consecutive monthly gains of 3.6% and 2.2%, respectively.
In the previous part, we discussed the chances of a distribution cut announcement from Buckeye Partners (BPL) during the company’s second-quarter earnings. In this part, we’ll discuss the possible stock price reaction in case the partnership goes ahead with a cut. The initial reaction would likely be negative considering the partnership’s strong historical distributions and general distribution growth recovery in the sector.
Plains All American Pipeline (PAA) stock has risen ~14% so far in 2018, outperforming many of its peers. Enterprise Products Partners (EPD) has risen ~9%, and Magellan Midstream Partners (MMP) is roughly flat YTD (year-to-date). The Alerian MLP ETF (AMLP) has fallen ~4% YTD. Crude-centric Plains All American Pipeline has largely tracked crude oil prices so far in 2018. Crude prices are up ~14% YTD.
The strong positive momentum for MLPs continues. The Alerian MLP Index (or AMZ), which includes 44 energy MLPs, ended in the green last week for the fourth consecutive week. It rose 1.5% to end at 274.9.
Between July 19 and 26, 2018, major energy ETFs’ correlation with US crude oil September futures were as follows: the SPDR S&P Oil & Gas Exploration & Production ETF (XOP): 93.8% the Energy Select Sector SPDR ETF (XLE): 84.9% the VanEck Vectors Oil Services ETF (OIH): 62% the Alerian MLP ETF (AMLP): 44.9%
Energy Transfer Partners’ (ETP) current distribution yield of 10.9% is close to its one-year low. The recent fall in the partnership’s distribution yield is the result of a sharp surge in its stock price.
MLPs had a weak start to last week amid weakness in crude oil and the Trump administration’s rejection of a demand from Plains All American Pipeline (PAA) that pipeline companies be exempted from the 25% tariff on steel imports.
Master limited partnerships and the relevant exchange traded funds rallied Thursday after the Federal Energy Regulatory Commission took steps it said ensure that natural gas pipeline rates remain fair. ...
Between July 12 and 19, major energy ETFs’ correlation with US crude oil August futures was as follows: The SPDR S&P Oil & Gas Exploration & Production ETF’s (XOP) was 98.1%. The Energy Select Sector SPDR ETF’s (XLE) was 90.8%. The VanEck Vectors Oil Services ETF’s (OIH) was 75.3%. The Alerian MLP ETF’s (AMLP) was 68.7%.
MLPs remained buoyant despite a sharp decline in crude oil last week. US crude oil saw a sharp 5.0% cut on July 11 following reports of a rise in crude oil exports from Libya. However, it recovered slightly on July 13 due to a significant decline in US crude inventories. Overall, WTI fell 3.8% during the week to close at $71.00 per barrel. For a recent update and outlook on crude oil prices, please read Why Oil Bears May Be at Risk.