The portfolio of 5 Natural Gas Transportation Stocks for 2013 was down slightly in April. The year-to-date performance of the individual stocks are shown in the following chart:
Assuming equal weight investments, the portfolio's YTD return is +7.67%. Dividends paid in April were:
- GE: $0.19 paid on 4/25/13
The total return of the portfolio, including dividends, is +8.49% YTD. In comparison, the S&P500 is up 9.24% so far this year.
Cummins Inc. (CMI) was a drag on the portfolio in April due to a disappointing Q1 earnings report. Net income per share was $1.49 versus $2.38 in the prior year. Despite the discouraging report, the company maintained full year guidance for revenues and EBIT. And there was some good news:
- Moody's Investors Service agency announced that it has raised the unsecured rating of Cummins to A3.
- Cummins announced that the next-generation QSB4.5 engine will meet Tier 4 Final near-zero emissions standards with increased horsepower and a higher peak torque.
- Cummins Westport announced that it has received certification for its ISX12 G (natural gas) engine from the U.S. Environmental Protection Agency.
General Electric (GE) also reported Q1 earnings during April. Operating earnings were $4.1 billion, or $0.39 per share, up 14% and 15% respectively from the first quarter of 2012. The company announced its "LNG In A Box" system for natural gas refueling stations. The company also announced its turbines will be used at a LNG liquification project in Maryland and a big contract down in the oil fields of Brazil.
Westport Innovations (WPRT) is the star performer of the portfolio YTD, up over 20%. There was not much in the way of news for the company during the month. Q1 earnings were released on May 2 and will be covered in next month's update.
Exxon Mobil (XOM) announced Q1 earnings of $2.12/share, up 6% Y/Y. Domestic refining and chemical results were very good. XOM bumped its quarterly dividend 6 cents a share ($2.52/share yearly) and now yields about 2.8%.
Conoco Phillips (COP) continues to execute well on its strategic plan. Asset sales continue and growing production in the Eagle Ford continues to be a positive catalyst for the company. Total production from the Eagle Ford, Permian, and Bakken production increased 42% Y/Y. Highlights from the company's Q1 earnings report can be found here.
Conclusion & Summary
Despite a move away from industrial stocks in April, the portfolio held up quite well and is less than a percentage point below the S&P 500's YTD performance. The fundamental economic and environmental advantages of natural gas transportation are still in place and bode well for the future of CMI and WPRT. Meantime, natural gas prices have firmed and will help Y/Y revenue and earnings comparisons for both XOM and COP. I still expect this portfolio to outperform the S&P 500 by year end.
Additional disclosure: I am an engineer, not a CFA. The information and data presented in this article was obtained from company documents and/or sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for investment decisions you make. Thanks for reading and good luck!