ENB

High Yield Dividend Newsletter Portfolio Holding BP Sees Cash Flow Profile Improvements Ahead

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Image Source: BP plc – Third quarter 2019 earnings infographic If you may wish to add the High Yield Dividend Newsletter to your membership, please click here. By Callum Turcan On October 29, BP plc (BP) reported third-quarter 2019 earnings, and shares of BP have since climbed higher due in part to the energy giant’s nice cash flow profile and likely due to the improving outlook for a narrow US-China trade deal. We include BP in our High Yield Dividend Newsletter portfolio as a way to play the raw energy resource market and generate sizable income streams while taking advantage of the protection its large midstream (pipelines, storage facilities, etc.), downstream (refineries and petrochemical plants), and retail (gas stations/convenience stores) operations … Read more

High Yield Dividend Newsletter Portfolio Holding Magellan Midstream Keeps Growing

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Image Shown: Magellan Midstream is focusing heavily on growing its fee-based operations, with an eye towards expanding its refined products pipeline segment. Image Source: Magellan Midstream Partners L.P. – August 2019 IR Presentation If you may wish to add the High Yield Dividend Newsletter to your membership, please click here. By Callum Turcan On October 31, Magellan Midstream Partners L.P. (MMP) — 6.6% yield — reported third quarter 2019 earnings. Its quarterly GAAP operating income climbed 8% year-over-year due to a combination of top-line growth (GAAP revenues up 3% year-over-year) and lower operating expenses (GAAP operating expenses down 3% year-over-year). Cost reductions were largely a function of reduced cost of products sales, meaning Magellan Midstream’s marketing division had a decent quarter … Read more

Saudi Arabia Attacked, Oil Prices Shoot Higher

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Image Shown: Saudi Arabia’s oil infrastructure was attacked over the weekend, causing WTI and Brent to rally at the start of the trading session. By Callum Turcan Disaster struck this weekend when several drones took out the Abqaiq oil processing facility and the massive onshore Khurais oil field in Saudi Arabia (KSA) on Saturday, with WTI and Brent both surging on the news once trading resumed at the start of the week. The Khurais oil field produces around 1.5 million barrels of crude per day and the Abqaiq oil processing facility is the largest in the world. Saudi Arabia’s oil production capacity was reduced by 5.7 million barrels of crude per day due to these attacks and the country is … Read more

BP Says Goodbye to Alaska After 60 Years

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Image Source: BP plc – IR Presentation By Callum Turcan On August 27, BP plc (BP) announced it was selling its entire Alaskan operations to privately held Hilcorp Alaska (an affiliate of Hilcorp Energy Company) for $5.6 billion. BP sold Hilcorp some of its Alaskan assets five years ago and both companies have had a working relationship since then. This truly marks the end of an era as BP was long a staple of Alaska’s oil & gas industry. BP operates the Prudhoe Bay oil field, one of the largest in the world, which was responsible for over half of Alaska’s oil production in 2018. Additionally, BP is a major shareholder in the company that owns the 800-mile long Trans … Read more

Kinder Morgan Reaches a Deal to Divest Stake in Canadian Spin-Off

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Image Shown: A look at Kinder Morgan Inc’s (KMI) massive oil & gas infrastructure operations that crisscross North America. The natural gas midstream giant is selling its Canadian segment by divesting its 70% equity stake in Kinder Morgan Canada and the US portion of the Cochin pipeline to Pembina Pipeline Corporation (PBA). Image Source: Kinder Morgan Inc – IR Presentation By Callum Turcan Dividend Growth Newsletter portfolio holding Kinder Morgan Inc (KMI), a giant in the natural gas midstream space, finally reached a deal to sell the remaining stake in its Canadian spin-off. On August 21, Kinder Morgan announced that it had sold its 70% equity stake in TSX-listed Kinder Morgan Canada Limited (KMLGF) along with the US portion of … Read more

Tallgrass Energy’s Growth Runway Shorter Than Expected

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Image Source: Tallgrass Energy LP – IR Presentation By Callum Turcan Valuentum’s High Yield Dividend Newsletter portfolio parted ways with Tallgrass Energy LP (TGE) on August 1, as we wanted to reduce our exposure to the midstream space. We don’t like TGE as much as we once did and think it’s best to move on to better opportunities. Please note Blackstone Group Inc (BX), through affiliates of Blackstone Infrastructure Partners, closed its purchase of Tallgrass’ general partner in March 2019 which included those parties acquiring a 44% economic interest in Tallgrass. In 2018, Tallgrass reorganized as a C-Corp which we were very supportive of. Additionally, the midstream company has been very free cash flow positive historically (when defined as net … Read more

Kinder Morgan Modestly Disappoints But Its Problems Are Transitory

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Image Shown: Kinder Morgan Inc expects a lot of organic growth opportunities will be generated via surging domestic demand for natural gas and rising natural gas export capacity in the US. Image Source: Kinder Morgan Inc – IR Presentation By Callum Turcan Natural gas pipeline giant Kinder Morgan Inc (KMI), a holding in our simulated Dividend Growth Newsletter portfolio, reported second quarter earnings for 2019 on July 17 which generally disappointed. Problems at its Elba LNG development in Georgia and weaker realized prices for raw energy resources produced by its upstream CO2 segment held down Kinder Morgan’s financial performance. We appreciate Kinder Morgan’s focus on fiscal discipline and see several of its problems as transitory, other than the raw energy … Read more

S&P Global: “Enterprise’s shift on cash flow reflects ‘metamorphosis’ of US pipeline firms”

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S&P Global: “While several major U.S. energy pipeline companies spent 2018 shedding cash-leaking habits and forging a more conventional financial structure as stocks languished, adopting reporting practices that are more accessible to the investing public could be a gradual process for the industry, if it takes flight at all.” S&P Global: “Enterprise’s shift on cash flow reflects ‘metamorphosis’ of US pipeline firms” Click here to read the article. Tickerized for holdings in the Alerian MLP ETF (AMLP). Pipelines – Oil & Gas: BPL, DCP, ENB, EPD, ET, GMLP, HEP, KMI, MMP, NS, PAA, WES —– Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not … Read more

MLPs Starting to Adopt Free Cash Flow?

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Image shown: Since mid-June 2015, the price of an ETF tracking the midstream MLP energy space (AMLP) has fallen more than 40% while the S&P 500 (SPY) has rallied more than 30%. No changes to simulated newsletter portfolios. By Brian Nelson, CFA Hi everyone! Hope you are having a nice start to the week. I have some great news for investors. In my lengthy piece from last Tuesday, which can read here, I talked about how master limited partnerships (MLPs) may be starting to embrace the very important metric free cash flow. If you remember, free cash flow is generally calculated as cash flow from operations less allcapital spending.  On the other hand, distributable cash flow, or the most widely-disseminated metric across midstream equities, generally excludes growth capital … Read more

Kinder Morgan Reiterates Dividend Growth Intention

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Image shown: Kinder Morgan’s pipeline network and estimated breakdown of 2018 EBDA. Source: Kinder Morgan investor presentation Pipeline operator Kinder Morgan has benefited from a significant increase in natural gas supply and demand of late, and it expects more of the same in 2019. Management continues to execute on its capital allocation priorities, and it reiterated previously-announced guidance for dividend growth in the years ahead.  By Kris Rosemann 2018 was a transformative year for Kinder Morgan (KMI). The once-troubled pipeline operator has come a long way in terms of capital allocation since its massive dividend cut in late 2015, but management continues to expect significant growth in the payout in the years ahead. The company’s growth in 2018 (fourth quarter … Read more