|Bid||17.95 x 1400|
|Ask||0.00 x 42300|
|Day's range||17.98 - 18.20|
|52-week range||14.69 - 19.83|
|PE ratio (TTM)||N/A|
|Earnings date||16 Oct 2018 - 22 Oct 2018|
|Forward dividend & yield||0.80 (4.43%)|
|1y target est||21.53|
In addition to the ~8% appreciation that we discussed in Part 1 of this series, Enterprise Products Partners (EPD) has offered three distribution payments in 2018, which brings its total returns to ~13% YTD (year-to-date). Enterprise Products Partners is trading at a yield of ~5.9%, which is ~280 basis points higher than the current US ten-year Treasury yield.
So far, Enterprise Products Partners (EPD) has risen ~8% in 2018 and outperformed the Alerian MLP ETF (AMLP), which has fallen ~2%. Enterprise Products has outperformed Kinder Morgan (KMI) and Magellan Midstream Partners (MMP), which have fallen 4% and 3%, respectively, YTD (year-to-date). Plains All American Pipeline (PAA) has risen 17% YTD.
Kinder Morgan (KMI) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
Midstream sector stocks underperformed the broader markets last week, which ended on September 14. The Alerian MLP Index gained 0.4% compared to a 1.2% rise for the S&P 500 Index. The Energy Select Sector SPDR ETF (XLE) rose 2% for the week, and crude oil prices increased 1.8%.
Pitting two of the largest midstream players in North America against each other reveals some interesting facts
Should the move succeed, it would mark the exit of the U.S. pipeline giant from Canada, having closed its sale of the Trans Mountain pipeline to the Canadian government for about C$4.5 billion at the end of last month. After the Reuters report on the hiring of the bank, shares in Kinder Morgan Canada Ltd , which completed its initial public offering just last year, turned positive and jumped 3.7 percent to a three-month high. Shares in Houston-based Kinder Morgan closed down 1.3 percent.
Pipeline battles and oppositions have long been a cause of concern in Canada and the condition in the United States is no different.
Rising coal prices could get another boost as Hurricane Florence shuts down exports from the Virginia coast, halting supplies to elsewhere in the world. With the powerful hurricane bearing down on the Southeast, terminals in and near Norfolk, Va., that handle the majority of U.S. coal exports were, as of Thursday afternoon, permitted to receive ships on a case-by-case basis, needing approval by the U.S. Coast Guard. Cutting off exports could support coal prices, which have already been rebounding, according to Seaport Global Securities LLC analyst Mark Levin.
Jim Cramer flies through his take on callers' favorite stocks, including an industrial at the top of investors' minds.
Among the three companies under review in this series, Williams Companies (WMB) looks fairly valued and has shown consistent earnings and revenue growth over the last several quarters. The stock looks poised for steady upward movement in the future.
Of the three midstream companies we’re discussing in this series, Kinder Morgan (KMI) has the most “buy” recommendations from analysts. Of the 20 analysts surveyed by Reuters covering Kinder Morgan, 75%—or 15 analysts—have rated the stock as a “buy.”
ONEOK (OKE) is trading at a forward EV-to-EBITDA (enterprise value-to-EBITDA) multiple of ~14.1x, which is higher than its five-year average multiple of ~13.1x. ONEOK’s multiple is also higher compared to Williams Companies’ (WMB) ~12.8x and Kinder Morgan’s (KMI) 10.3x.
ONEOK (OKE) stock has risen ~21% so far in 2018, outperforming its peers in the midstream sector. Kinder Morgan (KMI) and Williams Companies (WMB) have each fallen ~5% over the same timeframe. The Energy Select Sector SPDR ETF (XLE) has risen ~1% YTD (year-to-date).
Kinder Morgan (KMI), Williams Companies (WMB), and ONEOK (OKE) are currently trading at yields of ~4.5%, 4.6%, and 5.0%, respectively. Though they’re much lower than MLPs’ yields, the yields of these three companies are much higher than those of other S&P 500 companies.
Kinder Morgan (KMI) stock rose 0.7% last week. Although it was a small gain, it outperformed the midstream MLP sector represented by the Alerian MLP Index. Kinder Morgan stock is currently trading close to its 50-day moving average and ~4% above its 200-day moving average.
Top midstream stocks Enterprise Products Partners (EPD) and Kinder Morgan (KMI) rose 0.9% and 0.7%, respectively, last week, which ended September 7. However, Williams Companies (WMB) fell 3.4%, and Plains All American Pipeline (PAA) fell 3.3%. Crude oil prices fell ~2.9% during the week.
Based on analyst-adjusted numbers, Kinder Morgan (KMI) has the highest net debt-to-EBITDA ratio among the three S&P 500 midstream stocks under comparison: Kinder Morgan, Williams Companies (WMB), and ONEOK (OKE). ONEOK is the least levered among the three companies.
ONEOK (OKE) expects to spend $2.090 billion–$2.480 billion on capital projects in 2018, more than four times the $512 million the company spent on capital projects in 2017.