Midstream Energy: Metrics and Earnings Summary
John R. Cusick, CFA
John R. Cusick, CFA
Portfolio Manager
About the Video
We believe the energy industry is healthy, and the long-term supply/demand picture bodes well for the midstream sector, as does the continuing focus on free cash flow. In addition, despite over two years of good price performance, valuations remain compelling, in our view. In fact, we believe current valuations do not reflect the improvement in industry fundamentals.
Related Material
Midstream Energy: Metrics and Earnings Summary

We published our quarterly Midstream Metrics update highlighting the most important topics from the recent midstream energy earnings season.

We summarize the most recent distribution statistics and point out the most relevant increases we received from the companies in our portfolio. We believe investing in companies with high current income, growth of income, and financial strength, so this topic is always one of the most important to us.

These are the hottest topics, including management teams’ discussions, project updates, industry developments, and the most important news we heard during the quarter–the outlook for crude oil, refined products, and natural gas, for instance. We include a graph related to these topics, which we believe investors will find enlightening.

Lastly, we have several tables covering EBITDA, distribution growth, free cash flow, operating income, and debt metrics. We believe these charts provide a good overview of the last quarter’s numbers and how holdings in the portfolio are positioned.

Leverage continues to decline and shareholders are being rewarded through the combination of higher distributions and share buybacks. In addition, strong free cash flow coverage ratios, which we view as being an important indicator, are supportive of current distributions and the potential for distribution increases.

In addition, despite two years of strong performance, valuations remain compelling. In fact, we believe current valuations do not reflect the improvement in industry fundamentals.

The sector’s improved financial position, including stronger balance sheets, less reliance on debt and equity markets to finance growth projects, and most importantly, vastly improved free cash flow yields, point to a better investment.

To read the full version of Midstream Metrics and to learn more about Miller/Howard visit our website mhinvest.com. You can also follow us on Twitter and LinkedIn. Thank you.

DISCLOSURE

INVESTMENT PRODUCTS: ARE NOT FDIC INSURED - MAY LOSE VALUE - ARE NOT BANK GUARANTEED

Opinions and estimates offered constitute Miller/Howard Investments' judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. Nothing stated herein, including the mention of specific company names, should be construed as a recommendation to buy, hold, or sell any security, sector, or MLPs in general. To receive a list of all recommendations for the previous year, please email compliance@mhinvest.com. All investments carry a certain degree of risk, including possible loss of principal. It is important to note that there are risks inherent in any investment and there can be no assurance that any asset class will provide positive performance over any period of time. The material may also contain forward-looking statements that involve risk and uncertainty, and there is no guarantee they will come to pass.

Common stocks do not assure dividend payments. Dividends are paid only when declared by an issuer’s board of directors, and the amount of any dividend may vary over time. Dividend yield is one component of performance and should not be the only consideration for investment.

The information above is from sources deemed to be reliable and is provided strictly for the convenience of our investors and their advisors. These materials are solely informational. Legal, accounting and tax restrictions, transaction costs, and changes to any assumptions may significantly affect the economics of any transaction.

The information and analyses contained herein are not intended as tax, legal, or investment advice and may not be appropriate for your specific circumstances; accordingly, you should consult your own tax, legal, investment, or other advisors, at both the outset of any transaction and on an ongoing basis, to determine such appropriateness. Any investment returns — past, hypothetical, or otherwise — are not indicative of future performance.

Investment Decisions: Do not use this report as the sole basis for investment decisions. Do not select an allocation, investment discipline, or investment manager based on performance alone. Consider, in addition to performance results, other relevant information about each investment manager, as well as matters such as your investment objectives, risk tolerance, and investment time horizon.

The returns on a portfolio that utilizes environmental, social, or governance (ESG) criteria for stock selection may be lower or higher than portfolios where ESG factors are not considered, and the investment opportunities available to such portfolios may differ.

Past performance does not guarantee future results.

© 2024 Miller/Howard Investments.

DISCLOSURE

INVESTMENT PRODUCTS: ARE NOT FDIC INSURED - MAY LOSE VALUE - ARE NOT BANK GUARANTEED

Opinions and estimates offered constitute Miller/Howard Investments' judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. Nothing stated herein, including the mention of specific company names, should be construed as a recommendation to buy, hold, or sell any security, sector, or MLPs in general. To receive a list of all recommendations for the previous year, please email compliance@mhinvest.com. All investments carry a certain degree of risk, including possible loss of principal. It is important to note that there are risks inherent in any investment and there can be no assurance that any asset class will provide positive performance over any period of time. The material may also contain forward-looking statements that involve risk and uncertainty, and there is no guarantee they will come to pass.

Common stocks do not assure dividend payments. Dividends are paid only when declared by an issuer’s board of directors, and the amount of any dividend may vary over time. Dividend yield is one component of performance and should not be the only consideration for investment.

The information above is from sources deemed to be reliable and is provided strictly for the convenience of our investors and their advisors. These materials are solely informational. Legal, accounting and tax restrictions, transaction costs, and changes to any assumptions may significantly affect the economics of any transaction.

The information and analyses contained herein are not intended as tax, legal, or investment advice and may not be appropriate for your specific circumstances; accordingly, you should consult your own tax, legal, investment, or other advisors, at both the outset of any transaction and on an ongoing basis, to determine such appropriateness. Any investment returns — past, hypothetical, or otherwise — are not indicative of future performance.

Investment Decisions: Do not use this report as the sole basis for investment decisions. Do not select an allocation, investment discipline, or investment manager based on performance alone. Consider, in addition to performance results, other relevant information about each investment manager, as well as matters such as your investment objectives, risk tolerance, and investment time horizon.

The returns on a portfolio that utilizes environmental, social, or governance (ESG) criteria for stock selection may be lower or higher than portfolios where ESG factors are not considered, and the investment opportunities available to such portfolios may differ.

Past performance does not guarantee future results.

© 2024 Miller/Howard Investments.

Contact Us
Privacy Policy
Disclosures
Cookies