We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why DCP Midstream (DCP) is an Attractive Investment Bet
Read MoreHide Full Article
DCP Midstream, LP has gained 40.5% in the year-to-date period compared with 9.7% growth of the composite stocks belonging to the industry.
The company, currently flaunting a Zacks Rank #1 (Strong Buy), has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
DCP is one of the leading natural gas liquid producers and marketers in the United States. The partnership’s business model is designed to earn stable fee-based revenues from key midstream assets being utilized by shippers and customers over a long period.
DCP’s massive network of 51,000 miles of pipeline infrastructure provides clients with intricate connectivity. The midstream energy player’s 36 natural gas processing plants fetch high cash flow. DCP recently acquired the James Lake natural gas gathering and processing assets, expanding its presence in the Permian Basin oil and gas fields.
The partnership’s ability to generate free cash flow from operations is impressive. In 2021, DCP generated $122 million of excess free cash flow, which is about 44% higher than the 2020 level. For the nine months ended Sept 30, 2022, DCP generated an excess free cash flow of $553 million, up 46% year over year. This reflects the firm’s tremendous strength in operations and makes it well-positioned to pay dividends, reduce debt and contribute to growth.
DCP Midstream is committed to returning capital to unitholders. It also increased its quarterly distribution by 10%. The midstream player is gaining from resilient earnings from its diversified portfolio, having low exposure to volatile commodity prices. The partnership strongly focuses on strengthening its balance sheet with the foremost priority of reducing debt load. In the third quarter, the partnership paid out more than $300 million in absolute debt.
ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP’s third-quarter 2022 earnings per share of 38 cents beat the Zacks Consensus Estimate of 36 cents.
PUMP is expected to see an earnings rise of 145.3% in 2022. As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides a potential lifeline amid the difficult operating environment. The steep cutbacks to its capital budget further strengthen its financial position.
BP plc (BP - Free Report) is a fully integrated energy company with a strong focus on renewable energy. BP’s third-quarter adjusted earnings of $2.59 per American Depositary Share on a replacement-cost basis, excluding non-operating items, beat the Zacks Consensus Estimate of earnings of $1.94 per share.
BP is expected to see an earnings rise of 135% in 2022. Before reporting its December-quarter results, BP is willing to complete an additional $2.5 billion in share buybacks. BP boasted that this would make total declared share repurchases from 2022 surplus cash flow $8.5 billion.
Phillips 66 (PSX - Free Report) is the leading player in each of its operations, including refining, chemicals and midstream, in terms of size, efficiency and strengths. PSX’s third-quarter 2022 adjusted earnings per share of $6.46 beat the Zacks Consensus Estimate of $4.98.
PSX is expected to see an earnings rise of 242.6% in 2022. Phillips 66’s board of directors authorized a $5-billion increase to its stock repurchase program, bringing the total share repurchases authorized since 2012 to $20 billion. This reflects Phillips 66’s strong focus on returning capital to stockholders.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why DCP Midstream (DCP) is an Attractive Investment Bet
DCP Midstream, LP has gained 40.5% in the year-to-date period compared with 9.7% growth of the composite stocks belonging to the industry.
The company, currently flaunting a Zacks Rank #1 (Strong Buy), has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
DCP is one of the leading natural gas liquid producers and marketers in the United States. The partnership’s business model is designed to earn stable fee-based revenues from key midstream assets being utilized by shippers and customers over a long period.
DCP’s massive network of 51,000 miles of pipeline infrastructure provides clients with intricate connectivity. The midstream energy player’s 36 natural gas processing plants fetch high cash flow. DCP recently acquired the James Lake natural gas gathering and processing assets, expanding its presence in the Permian Basin oil and gas fields.
The partnership’s ability to generate free cash flow from operations is impressive. In 2021, DCP generated $122 million of excess free cash flow, which is about 44% higher than the 2020 level. For the nine months ended Sept 30, 2022, DCP generated an excess free cash flow of $553 million, up 46% year over year. This reflects the firm’s tremendous strength in operations and makes it well-positioned to pay dividends, reduce debt and contribute to growth.
DCP Midstream is committed to returning capital to unitholders. It also increased its quarterly distribution by 10%. The midstream player is gaining from resilient earnings from its diversified portfolio, having low exposure to volatile commodity prices. The partnership strongly focuses on strengthening its balance sheet with the foremost priority of reducing debt load. In the third quarter, the partnership paid out more than $300 million in absolute debt.
Key Picks
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP’s third-quarter 2022 earnings per share of 38 cents beat the Zacks Consensus Estimate of 36 cents.
PUMP is expected to see an earnings rise of 145.3% in 2022. As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides a potential lifeline amid the difficult operating environment. The steep cutbacks to its capital budget further strengthen its financial position.
BP plc (BP - Free Report) is a fully integrated energy company with a strong focus on renewable energy. BP’s third-quarter adjusted earnings of $2.59 per American Depositary Share on a replacement-cost basis, excluding non-operating items, beat the Zacks Consensus Estimate of earnings of $1.94 per share.
BP is expected to see an earnings rise of 135% in 2022. Before reporting its December-quarter results, BP is willing to complete an additional $2.5 billion in share buybacks. BP boasted that this would make total declared share repurchases from 2022 surplus cash flow $8.5 billion.
Phillips 66 (PSX - Free Report) is the leading player in each of its operations, including refining, chemicals and midstream, in terms of size, efficiency and strengths. PSX’s third-quarter 2022 adjusted earnings per share of $6.46 beat the Zacks Consensus Estimate of $4.98.
PSX is expected to see an earnings rise of 242.6% in 2022. Phillips 66’s board of directors authorized a $5-billion increase to its stock repurchase program, bringing the total share repurchases authorized since 2012 to $20 billion. This reflects Phillips 66’s strong focus on returning capital to stockholders.