We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Can Midstream Energy Firms Weather a Volatile Energy Market?
Read MoreHide Full Article
Key Takeaways
Kinder Morgan relies on take-or-pay contracts that support stable fee-based revenues and lower risk.
MPLX generates stable cash flows from long-term shipper contracts and fee-based gathering systems.
Williams is positioned to benefit from natural gas demand with a pipeline network spanning 30,000 miles.
The stock market is experiencing uncertainty stemming from Middle East tensions, which pushed oil prices higher and created lasting inflationary pressure. It is likely that investors, most of whom are risk-averse, are looking for stocks that can withstand the current market ups and downs.
The uncertainty and volatility have been reflected in wild oil price movements as conflicts in the Middle East continue to affect energy markets. However, not all stocks are affected by the ongoing challenges. Three midstream players, Kinder Morgan, Inc. (KMI - Free Report) , MPLX LP (MPLX - Free Report) and The Williams Companies, Inc. (WMB - Free Report) , are well-poised to gain. Let's delve deeper.
Resilient Midstream Business
Stocks in the midstream space have lower exposure to volatility in commodity prices than oil and gas producers. This is because midstream players generate stable fee-based revenues since the transportation and storage assets are being booked by shippers for the long term. Hence, their business model is relatively low-risk, which indicates considerably less exposure to oil and gas prices and volume risks.
3 Pipeline Stocks to Gain: KMI, MPLX & WMB
Kinder Morgan: With its operating interests in oil and gas pipeline networks spread across 78,000 miles, KMI is a leading energy infrastructure company in North America. It derives most of its earnings from take-or-pay contracts, generating stable fee-based revenues.
The midstream energy major is likely to grow on the back of its business model, which is relatively resilient to volume and commodity price risks.
MPLX: MPLX’s midstream business comprises transporting crude oil and refined products. The partnership generates stable cash flows from its long-term contracts with the shippers. Its crude oil and natural gas gathering systems also generate stable fee-based revenues.
The Williams Companies: The company is well-poised to capitalize on the mounting demand for clean energy since it is engaged in transporting, storing, gathering and processing natural gas and natural gas liquids.
With its pipeline networks spread across more than 30,000 miles, The Williams Companies connects premium basins in the United States to key markets. WMB’s assets can meet a considerable proportion of the nation’s natural gas consumption, which is utilized for heating purposes and clean energy generation.
View the Zacks #1 Rank List
Image: Bigstock
Can Midstream Energy Firms Weather a Volatile Energy Market?
Key Takeaways
The stock market is experiencing uncertainty stemming from Middle East tensions, which pushed oil prices higher and created lasting inflationary pressure. It is likely that investors, most of whom are risk-averse, are looking for stocks that can withstand the current market ups and downs.
The uncertainty and volatility have been reflected in wild oil price movements as conflicts in the Middle East continue to affect energy markets. However, not all stocks are affected by the ongoing challenges. Three midstream players, Kinder Morgan, Inc. (KMI - Free Report) , MPLX LP (MPLX - Free Report) and The Williams Companies, Inc. (WMB - Free Report) , are well-poised to gain. Let's delve deeper.
Resilient Midstream Business
Stocks in the midstream space have lower exposure to volatility in commodity prices than oil and gas producers. This is because midstream players generate stable fee-based revenues since the transportation and storage assets are being booked by shippers for the long term. Hence, their business model is relatively low-risk, which indicates considerably less exposure to oil and gas prices and volume risks.
3 Pipeline Stocks to Gain: KMI, MPLX & WMB
Kinder Morgan: With its operating interests in oil and gas pipeline networks spread across 78,000 miles, KMI is a leading energy infrastructure company in North America. It derives most of its earnings from take-or-pay contracts, generating stable fee-based revenues.
The midstream energy major is likely to grow on the back of its business model, which is relatively resilient to volume and commodity price risks.
MPLX: MPLX’s midstream business comprises transporting crude oil and refined products. The partnership generates stable cash flows from its long-term contracts with the shippers. Its crude oil and natural gas gathering systems also generate stable fee-based revenues.
The Williams Companies: The company is well-poised to capitalize on the mounting demand for clean energy since it is engaged in transporting, storing, gathering and processing natural gas and natural gas liquids.
With its pipeline networks spread across more than 30,000 miles, The Williams Companies connects premium basins in the United States to key markets. WMB’s assets can meet a considerable proportion of the nation’s natural gas consumption, which is utilized for heating purposes and clean energy generation.