22.25 0.00 (0.00%)
After hours: 4:19PM EDT
|Bid||19.35 x 800|
|Ask||22.25 x 1800|
|Day's Range||22.19 - 22.85|
|52 Week Range||22.19 - 35.85|
|Beta (3Y Monthly)||0.83|
|PE Ratio (TTM)||14.41|
|Forward Dividend & Yield||2.47 (10.83%)|
|1y Target Est||N/A|
(Bloomberg Opinion) -- Relying on master limited partnerships in recent years has been great for insomnia – as in, causing it. Two MLPs (and one ex-MLP) hosting earnings calls Wednesday morning showed why.Western Midstream Partners LP went first. It was not one of those great-quarter-guys calls, what with the company missing estimates by a mile and also cutting guidance. Having dropped as much as 16% in early trading, the units later stabilized (in an ICU sort of a way) at just 12.5% lower as the morning wore on. The company blamed most of the guidance cut on lower volumes running through its pipes as Permian-basin producers took an unusual amount of downtime, due in part to a lot of “weather-related” factors such as lightning strikes.It doesn’t help that this all comes less than a year after Western Midstream bought a big slug of assets from parent Anadarko Petroleum Corp., collapsed its corporate structure with promises of raising distributions by 6%-8% in 2019 (now 5%-6%), and changed its CEO. Plus majority unitholder Anadarko is due to soon be part of Occidental Petroleum Corp. And Oxy is expected to sell much (or all) of the stake in Western Midstream to help pay down the resulting debt. In short, now is an especially inauspicious time for lightning to strike the earnings outlook.Oxy, of course, will soon join the ranks of those relying on MLPs because of the Anadarko deal. The value of its pro-forma stake in Western Midstream just dropped by roughly $1 billion in a matter of hours. Granted, offloading some or all of the MLP still makes a lot of sense, as it would let Oxy deconsolidate $7.1 billion of net debt on Anadarko’s balance sheet. But a billion dollars is a billion dollars, and Oxy can use every single one as it strives to justify the deal. It was one of only a handful of oil stocks down on a generally bullish morning for the E&P sector.It didn’t help that Enterprise Products Partners LP, the biggest MLP by market cap, hosted its own call soon after Western Midstream’s. Asked directly whether Enterprise was also seeing the impact of weather issues on its clients in the Permian basin, the answer was no (so Western Midstream was really unlucky, it seems). What’s more – and a hat-tip here to Hinds Howard, midstream portfolio manager at CBRE Clarion Securities, for pointing this out – CFO Randy Fowler dismissed a question about M&A by noting organic expansion offered better growth for less capital. None of this suggests Enterprise is champing at the bit to buy any stake in Western Midstream at a high price.More broadly, it also didn’t help that Enterprise just reported its seventh quarter of better-than-expected earnings in a row. The resulting 3% gain Wednesday morning took its units to their highest level in almost five years – that innocent early fall of 2014 before oil prices crashed and MLPs entered the meat grinder.How can good news from Enterprise be bad news? Because of this:In the intervening five years, Enterprise raised its annualized distributions by 23% while also reducing its leverage at a time when many of peers slashed payouts to protect balance sheets. Yet, now offering a yield of almost 6%, it trades at a 10% discount to the S&P 500 on Ebitda multiples versus a 74% premium five years ago. Enterprise is a good company in a neighborhood – MLPville – most folks now just want to avoid. It also happens to be a very large resident, making it tough for individual fund managers to keep loading up (see this).As if to drive this point home, ex-MLP Oneok Inc. also fired up its webcast Wednesday. At just under 8%, it beat earnings estimates by almost exactly the same margin as Enterprise. Yet Oneok’s stock jumped by almost 5% – taking it not to where it was five years ago, but close to its recent all-time high. At almost 14 times Ebitda, it trades at a 15% premium to the market, having been re-rated sharply upward in mid-2017, when it ditched its MLP structure in favor of a regular C-Corp.The latter is a more bustling neighborhood these days, offering a bigger pool of capital on cheaper terms (in return for better liquidity and governance). Barring the equivalent of a lightning strike, that fundamental advantage over MLPs isn’t likely to change soon.To contact the author of this story: Liam Denning at firstname.lastname@example.orgTo contact the editor responsible for this story: Mark Gongloff at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
New York, NY, based Investment company C V Starr & Co Inc (current portfolio) buys Western Midstream Partners LP, sells Western Midstream Partners LP during the 3-months ended 2019Q2, according to the most recent filings of the investment company, C V Starr & Co Inc. Continue reading...
Being one of the largest motor fuel distributors in the wholesale market in terms of volume, Sunoco (SUN) is likely to maintain share price momentum on the back of multiple tailwinds.
(Bloomberg Opinion) -- That Carl Icahn: Give him an inch and he’ll take four board seats. Try to, anyway.Late on Wednesday, the veteran corporate gadfly filed a preliminary proxy statement on Occidental Petroleum Corp. He wants to gather together a fifth of the company’s stockholders of record to force the board to fix a date to determine who can participate in a consent solicitation, akin to a virtual shareholder meeting. Get that done, and Icahn wants to nominate four new directors and ease what he regards as onerous by-laws that make it hard for shareholders to shake things up at Oxy.Icahn’s beef with Oxy is that it overpaid for Anadarko Petroleum Corp. and took expensive financing from Warren Buffett in order to avoid letting its own shareholders have a say. He has a point. Oxy raised its bid (against itself) when Brent crude was still above $70 a barrel, and taking Berkshire Hathaway Inc.’s $10 billion was aimed squarely at avoiding a vote by Oxy’s own investors. In that context, even the opener to Oxy’s boilerplate response to Icahn’s filing rings a little hollow:We maintain an open dialogue with all our shareholders and welcome constructive input toward our shared goal of maximizing long-term value. Icahn’s real opening, however, is what the Anadarko saga has done to Oxy’s stock, the worst-performing large-cap U.S. oil and gas producer this year. Relative to the Energy Select Sector SPDR Fund, Oxy is down about 19% since April 11, just before Chevron Corp.’s rival offer for Anadarko became public. That translates to more than $9 billion of value lost because of a deal touting billions in annual synergies:Worse, Chevron’s discipline, in keeping with the investor zeitgeist, has been rewarded: Its value has risen by more than $10 billion in relative terms. Whether or not Icahn can pull off his tricky maneuver against the board, his presence and special brand of rhetoric will keep the spotlight on all this. Oxy is rumored to be marketing some of Anadarko’s stake in its pipelines business, Western Midstream Partners LP, which would let it realize some cash and deconsolidate the subsidiary’s debt. Given the relative complexity of the deal – reportedly selling part of a stake in a listed entity – and Oxy’s clear motivation to reduce its pro-forma leverage, the company will have its work cut out to realize full value. Not doing so, however, would add to the sense that winning Anadarko has exacted a heavy cost in capital terms. And one motivated shareholder, in particular, will be watching very closely.To contact the author of this story: Liam Denning at firstname.lastname@example.orgTo contact the editor responsible for this story: Mark Gongloff at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The master limited partnership completed a consolidation and a $4 billion drop-down deal earlier this year.
Moody's Investors Service (Moody's) placed all ratings of Occidental Petroleum Corporation (OXY) under review for downgrade, including its A3 senior unsecured debt rating and its P-2 commercial paper rating. OXY has proposed issuing 0.6094 new shares and $38.00 cash for each share of Anadarko, resulting in overall consideration that is 50% equity and 50% cash.
There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Jeff Ubben, George Soros and Carl Icahn think. Those hedge fund operators make billions of […]
NOTE: On April 17, 2019, the press release was corrected as follows: The methodology paragraph was changed to: The principal methodology used in rating Chevron Corporation, Chevron Canada Funding Company, Chevron Capital U.S.A. Inc., Chevron Funding Corporation, and Texaco Capital Inc. was Global Integrated Oil & Gas Industry published in October 2016. The principal methodology used in rating Anadarko Petroleum Corporation, Kerr-McGee Corporation, Anadarko Finance Company, and Union Pacific Resources Group Inc. was Independent Exploration and Production Industry published in May 2017.
A Surprise Megadeal: Chevron to Acquire Anadarko(Continued from Prior Part)Anadarko acquisitionChevron (CVX) has agreed to acquire Anadarko (APC) in a cash and equity deal. The transaction is expected to close in H2 2019, subject to requisite
Five MLPs with Strong Total Return Potential(Continued from Prior Part)Western Midstream PartnersWestern Midstream Partners (WES) offers a solid potential upside of more than 30% compared to its current market price of $31.85. Analysts have
With its simplification transaction complete, the newly named Western Midstream Partners looks like a compelling option for income-seeking investors.
Energy Sector Highlights Last Week(Continued from Prior Part)Energy stocks In the week ending March 15, upstream stock Laredo Petroleum (LPI) fell the most among the energy stocks under review in this series, which include the following ETFs: the
The Woodlands-based Western Gas Equity Partners LP (NYSE: WGP) and Western Gas Partners LP (NYSE: WES) — master limited partnerships formed by Anadarko Petroleum Corp. (NYSE: APC) — completed their previously announced consolidation and changed their names on Feb.
Western Gas Partners, LP is engaged in gathering, processing, compressing, treating and transporting natural gas, condensate, NGLs and crude oil for its subsidiaries as well as third-party producers and customers. The dividend yield of Western Gas Partners, LP stocks is 7.55%. Western Gas Partners, LP had annual average EBITDA growth of 2.80% over the past ten years.
Moody's Investors Service ("Moody's") changed the rating outlook for Anadarko Petroleum Corporation (Anadarko) to positive from stable. Moody's also affirmed the ratings for Anadarko and its guaranteed subsidiaries, including Anadarko's Ba1 Corporate Family Rating (CFR), Ba1 senior unsecured ratings and SGL-2 Speculative Grade Liquidity Rating.
How Analysts View the Top MLPs at the Beginning of 2019 (Continued from Prior Part) ## Magellan Midstream Partners Magellan Midstream Partners (MMP) offers a potential upside of more than 21% based on analysts’ median target price of $73.2. Magellan Midstream Partners is trading at $60.3. Among the 21 analysts tracking Magellan Midstream Partners, six recommended a “strong buy,” five recommended a “buy,” nine recommended a “hold,” and one recommended a “sell” as of January 8. UBS cut Magellan Midstream Partners’ target price from $76.0 to $74.0 last week. The above chart shows the normalized price performance of Magellan Midstream Partners stock along with the Alerian MLP ETF (AMLP). ## Valuation and distribution yield Magellan Midstream Partners is trading at an EV-to-EBITDA multiple of 12x based on analysts’ earnings estimates for 2019. The company looks relatively expensive compared to its peers. Magellan Midstream Partners’ historical valuation multiple is beyond 19x. Currently, Magellan Midstream Partners offers a distribution yield of 6.6%. The company raised its distribution ~13% in the last five years. ## Peer comparison Western Gas Partners (WES) has a median target price of $54.9—compared to its current market price of $46.1. The target price indicates a potential upside of more than 19% for the next 12 months. Western Gas Partners stock looks relatively cheap considering its forward EV-to-EBITDA multiple at 7.6x. Analysts expect a strong year-over-year earnings growth of more than 25% in 2019. Western Gas Partners offers a distribution yield of 8.6%, which is in line with the industry average. Western Gas Partners’ distribution grew 11.4% in the last five years. Continue to Next Part Browse this series on Market Realist: * Part 1 - How Analysts View the Top MLPs at the Beginning of 2019 * Part 2 - Enterprise Products Partners: Analysts Are Positive * Part 3 - Is Plains All American Pipeline Stock a Good Bargain?
Seven energy stocks in one specific sector, oil pipelines, are poised for a 'Goldilocks' rebound in 2019, according to Goldman Sachs and UBS. They have been pummeled by falling oil prices over the last year.
On November 8, Western Gas Equity Partners (WGP) announced an agreement to acquire Western Gas Partners (WES) in a unit-for-unit exchange. Once completed, Western Gas Equity Partners is to own ~98% of WES and parent Anadarko Petroleum (APC) will own ~2%. The acquisition is expected to complete in Q1 2019.
Anadarko Petroleum unveiled its plans for 2019, which include another dividend increase and a boost to its stock buyback authorization.