Crestwood Equity Partners -- A Top Notch High-Yield MLP

TL;DR

Crestwood Equity Partners, an MLP pipeline company, shows solid financial turnaround and growth potential.

Transcript

Nick Sciple: Let's pivot into your main discussion today, which is pipeline companies. The first company we want to talk about is Crestwood Equity Partners. Their an MLP pipeline business. They yield a little over 7%. Up about 28% year to date. They have a fairly well-covered distribution, about a 1.2X distribution coverage ratio. When you look at ... Read More

Key Insights

• 🥳 Crestwood Equity Partners has undergone a financial turnaround with improved leverage ratios and distribution coverage.
• 🫢 The company's focus on gathering and processing natural gas has been profitable, especially in regions like the Bakken and Permian.
• 💐 Partnerships with producers like Chesapeake Energy and Shell Midstream Partners provide Crestwood with steady cash flow and growth opportunities.
• 💐 Crestwood projects significant growth in its cash flow per unit through 2020.
• 💗 Investors should monitor Crestwood's focus on growing earnings per unit and sustainable distribution growth for long-term value creation.
• 💐 The company's steady growth and reliable cash flows make it an attractive income-focused investment.
• 🧘 Crestwood's strategic investments in infrastructure and partnerships position them for future growth and success.

Questions & Answers

Q: What key factors contributed to Crestwood Equity Partners' financial turnaround?

Crestwood's improved leverage ratios, distribution coverage, asset sales, and partnerships helped strengthen their financial position and turnaround.

Q: How does Crestwood Equity Partners benefit from partnerships with producers like Chesapeake Energy and Shell Midstream Partners?

These partnerships provide Crestwood with steady cash flows, visibility into production growth, and strategic investments in gathering pipelines to support drilling operations.

Q: What growth opportunities does Crestwood Equity Partners project for its cash flow per unit through 2020?

Crestwood anticipates a cumulative annual growth rate in their cash flow per unit at 15% through 2020, driven by investments in infrastructure and partnerships with key producers.

Q: What should investors consider when evaluating Crestwood Equity Partners as an investment opportunity?

Investors should focus on Crestwood's focus on growing earnings per unit, sustainable distribution growth, and their ability to generate steady cash flows for reinvestment in new projects.

Summary & Key Takeaways

• Crestwood Equity Partners, an MLP pipeline business, has seen a turnaround in financials with improved leverage ratios and distribution coverage.

• The company's main business is gathering and processing natural gas, benefiting from increased drilling activities.

• Crestwood's partnerships with producers like Chesapeake Energy and Shell Midstream Partners provide steady cash flow opportunities and growth prospects.