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QEP Resources +2% on plans to separate midstream business

  • QEP Resources' (QEP +2.1%) announcement that it will pursue a separation of its midstream business and its interest in QEP Midstream Partners (QEPM +2%) did not specify how it would be achieved, but Sterne Agee thinks it will happen through an IPO or an outright sale of the field services company and the interest in QEPM.
  • There's a lot of room for growth in the midstream limited partnership, where incentive distribution rights kick in after a distribution of $0.2875 to limited partners, Sterne says; in Q3, the partnership distributed just $0.13.
  • The firm also raises its price target on QEP to $39 from $36, based on a sum-of-the-parts estimated value.
Comments (1)
  • User 353732
    , contributor
    Comments (4788) | Send Message
     
    There is a very large appetite for new midstream energy MLPs yielding 7% or more: the expectation is that as these MLPs establish themselves, prices will be bid up so the yields are closer to 5.5%, providing both capital appreciation and desirable current income that is shielded from taxes .....while the stock is held
    3 Dec 2013, 12:29 PM Reply Like
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