High Yield Dividend Stock with Great Cash Flow

TL;DR

Crestwood Equity Partners is a well-run midstream company with strong cash flow and a high dividend yield of 8.8%.

Transcript

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Key Insights

• ❓ Crestwood Equity Partners operates in lucrative basins like Bakken, Potter River, and Permian.
• 🤨 The company has a strong dividend yield of 8.8% and plans to raise it by 5% this year.
• 💐 Acquiring Oasis Midstream adds to their cash flow and industry influence.
• 🛄 Crestwood aims to be a consolidator in the midstream sector through strategic acquisitions.
• 👂 The company’s sound management of cash flow and balance sheet positions them for future growth.
• 🏛️ Expansion projects, like building pipelines for major companies, contribute to Crestwood’s revenue stream.
• 🫢 Crestwood benefits from rising gas prices due to the nature of their contract structure.

Questions & Answers

Q: What sets Crestwood Equity Partners apart from other midstream companies?

Crestwood stands out due to its strategic locations in key basins and a focus on expansion projects, coupled with a high dividend yield and strong cash flow management.

Q: How does the recent acquisition of Oasis Midstream benefit Crestwood Equity Partners?

Acquiring Oasis Midstream adds to their cash flow and strengthens their position in the market, especially with the backing of a major player like Whiting Petroleum.

Q: What are Crestwood Equity Partners’ plans for growth and expansion?

Crestwood plans to invest in building pipelines, expanding connections for drilling companies, and potentially acquiring other players in the midstream sector to consolidate their position.

Q: How does Crestwood maintain its high dividend yield and manage its cash flow effectively?

The company ensures dividend sustainability by covering it with cash flow, investing in expansion projects, and utilizing free cash flow for strategic actions like buybacks and funding growth initiatives.

Summary & Key Takeaways

• Crestwood Equity Partners is a midstream company that connects wells to pipelines and processing plants generating significant cash flow.

• They operate in high-value basins like Bakken, Potter River, and Permian, with plans for expansion projects.

• The company offers a strong dividend yield of 8.8% and has a solid balance sheet for future growth and acquisitions.