Back to top

Image: Bigstock

Here's Why You Should Buy Shell Midstream (SHLX) Stock Now

Read MoreHide Full Article

Shell Midstream Partners LP generates stable fee-based revenues and is well positioned to capitalize on the ongoing pipeline bottleneck problem in U.S. shale plays. Thus, it seems wise to add the stock to your portfolio now.

All analysts are bullish on the stock at the moment. Notably, over the past 30 days, the Zacks Consensus Estimate for earnings has been revised 7.5% and 8.2% upward for 2019 and 2020, respectively.

Moreover, the price performance of the master limited partnership — formed by Royal Dutch Shell plc — looks impressive. The stock, sporting a Zacks Rank #1 (Strong Buy), has rallied 19.7% year to date against the industry’s0.6% decline.

Here’s Why the Stock is a Solid Pick

The partnership has interests in diverse midstream infrastructures, which include pipeline networks, transporting crude oil and refined petroleum products, and terminals. Precisely, the pipeline system carries produced crude oil from the onshore and offshore U.S. resources to the refineries along the Gulf Coast and Midwest regions. From the refineries, the partnership’s pipeline systems transport the refined products to the key markets. Thus, Shell Midstream secures stable fee-based revenues.

Moreover, with interests in Zydeco Pipeline Company LLC (Zydeco), Shell Midstream is well positioned to eradicate the existing onshore pipeline bottleneck problem in carrying crude from the Eagle Ford shale, Permian Basin and Bakken shale to Houston, TX.

Importantly, the partnership has an impressive distribution payment history. Shell Midstream earlier received approval from its board of directors to increase third-quarter 2019 distribution by 3.5% sequentially and 16.5% annually. Thus, the partnership hiked distributions for 19 successive quarters.

Other Stocks to Consider

Other prospective players in the energy space include Murphy USA Inc (MUSA - Free Report) and CNX Resources Corporation (CNX - Free Report) . While Murphy USA sports a Zacks Rank #1, CNX Resources carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA beat the Zacks Consensus Estimate in three of the prior four quarters.

CNX Resources surpassed the Zacks Consensus Estimate in two of the prior four quarters, the average positive earnings surprise being 34.8%.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


CNX Resources Corporation. (CNX) - free report >>

Murphy USA Inc. (MUSA) - free report >>

Published in