Targa Resources Corp - Bonds Still Look Attractive One Year Later
Downtown Investment Advisory
Downtown Investment Advisory
Targa Resources For Supercharged MLP Dividend Growth And No Tax Headaches
Tim Plaehn • 15 Comments
Tim Plaehn • 15 Comments
Wed, Jul. 20, 5:50 AM
Wed, Jul. 6, 11:58 AM
- Investors may find it difficult to capitalize on propane's big rally, as the rally has come so quick and so fast that it may be too late to hop on board, WSJ reports.
- Jefferies analyst Christopher Sighinolfi had been bullish on many propane pipeline and processing companies when others were skeptical, but recently downgraded Oneok (OKE -1.2%), DCP Midstream Partners (DPM +0.8%), EnLink Midstream Partners (ENLK +0.1%) and Targa Resources (TRGP -0.1%) largely because they became too expensive.
- “We were also concerned with how confident and convicted clients seemed about the prospect for prices to just continue climbing and simultaneously dismissive they are” about declining volumes, Sighinolfi said.
- Others think propane could still rise quickly in the near term from exports and domestic heating and agriculture demand; Greg Sharenow of Pacific Investment Management says "propane is a significantly better value with inventories falling below last year’s level and exports already at a pretty substantial level.”
Wed, Jul. 6, 8:46 AM
- Sanchez Production Partners (NYSEMKT:SPP) agrees to acquire Sanchez Energy's (NYSE:SN) 50% interest in Carnero Gathering, a joint venture that is 50% owned by Targa Resources (NYSE:TRGP), for $44.4M.
- Carnero will own 45 miles (10 miles of which remain under construction) of high pressure natural gas gathering pipelines that currently connect SPP's existing Western Catarina Midstream system to nearby pipelines in south Texas, which will connect to a cryogenic natural gas processing plant now under construction.
- SN has invested $26M in Carnero Gathering since entering the joint venture with Targa in October 2015; the processing plant is expected to be operational in early 2017.
Wed, Jun. 8, 1:57 PM
- Targa Resources (TRGP -3.7%) is downgraded to Hold from Buy with a $45 price target at Jefferies, which cites valuation and the potential for further pressure on margins.
- Jefferies says TRGP's Q1 EBITDA of $265M easily beat its estimate of $222M and Wall Street expectations of $255M, and distributable cash flow of $178M also came in well above the firm's estimate of $124M.
- The firm expects TRGP to keep its quarterly cash dividend unchanged at $0.91/share through 2018 with ~5% annual growth resuming in 2019.
- TRGP has surged 72% YTD, including a 91% rip higher since its February lows.
Tue, May 31, 6:55 PM
- Energy Transfer Partners (NYSE:ETP) offers "safe yield and growth prospects" for 2018 and beyond, Barclays says as it reiterates its Outperform rating and raises its price target to $48.
- ETP will benefit from $10B of organic projects under execution, which Barclays sees adding close to $1B of distributable cash flow by 2019; "while we forecast debt to EBITDA to remain ~4.5x in 2016, we see this falling to low 4x in 2017-plus, which we think will help valuation," the firm writes.
- The start-up of the Lone Star Express project in 2016 will bring 180K-280K bbl/day of new NGL pipeline capacity, and new projects "position ETP well in capturing volume upside from ethane recovery expected when new crackers come on line in 2017-2019," the firm says.
- Barclays also notes that ETP continues to trade at a discount to key NGL players such as ONEOK Partners (NYSE:OKS), DCP Midstream Partners (NYSE:DPM) and Targa Resources (NYSE:TRGP); the firm thinks ETP's current yield of 11.82% reflects a 320 bps discount to the group.
Mon, May 2, 7:55 AM
- April monthly performance was: +2.25%
- $0.24 in dividends were paid in April
- Top 10 Holdings as of 3/31/2016: Targa Resources Corp (TRGP): 1.5%, Cal-Maine Foods Inc (CALM): 1.34%, Covanta Holding Corp (CVA): 1.1%, Innoviva Inc (INVA): 1.09%, Regal Entertainment Group (RGC): 0.94%, Black Hills Corp (BKH): 0.84%, ALLETE Inc (ALE): 0.8%, Pattern Energy Group Inc Class A (PEGI): 0.78%, Joy Global Inc (JOY): 0.74%, The Laclede Group Inc (LG): 0.72%
Fri, Apr. 29, 7:11 AM
Wed, Apr. 20, 6:15 PM
Mon, Apr. 4, 7:24 AM
- March monthly performance was: +9.16%
- 52-week performance vs. the S&P 500 is: -5%
- $0.11 in dividends were paid in March
- Top 10 Holdings as of 2/29/2016: Cal-Maine Foods Inc (CALM): 1.49%, Targa Resources Corp (TRGP): 1.45%, Innoviva Inc (INVA): 1.1%, Covanta Holding Corp (CVA): 0.98%, Regal Entertainment Group (RGC): 0.94%, Black Hills Corp (BKH): 0.85%, ALLETE Inc (ALE): 0.81%, Pattern Energy Group Inc Class A (PEGI): 0.75%, The Laclede Group Inc (LG): 0.75%, WisdomTree MidCap Dividend ETF (DON): 0.72%
Tue, Mar. 8, 6:58 PM
- Much of the recent upturn in energy MLPs may stem from the publicized purchases in the Alerian index and former MLP Kinder Morgan by Berkshire Hathaway and the Oklahoma Teachers Retirement System, but insiders also have been supporting at least a handful of the bigger MLPs.
- A recent report from RBC focuses on insider buying in the group, highlighting four companies that have enjoyed insider purchases of millions of shares YTD.
- Insiders have bought more than 5M units of Crestwood Equity Partners (NYSE:CEQP) even as many observers see the MLP struggling to maintain its massive 63% distribution yield.
- Energy Transfer Equity (NYSE:ETE) saw 4.12M units bought by insiders even amid the questions swirling around its proposed purchase of Williams Cos.; Summit Midstream Partners (NYSE:SMLP) and Plains GP Holdings (NYSE:PAGP) have enjoyed respective insider buys of nearly 3M and 2.2M units YTD.
- SL Advisors also notes that Plains All America (NYSE:PAA) issued $1.6B in convertible preferred units to a group of P-E investors that were already invested in PAA and thus know the business well; Targa Resources (NYSE:TRGP) issued $500M in similar securities.
Wed, Mar. 2, 2:28 PM
- While energy supply and demand dynamics may be about to start improving, the benefits are not yet evident in the profit picture for midstream MLPs, Wunderlich's Jeff Birnbaum writes, as declining onshore crude production will continue to challenge midstream operators.
- E&P guidance and more recent EIA data indicates more significant declines may come in 2016 than expected several months ago, according to Birnbaum.
- Among individual MLPs, the analyst expects Plains All American (PAA +2.3%) to use its scale, downstream operations and lack of 2016 financing needs as weapons to take share from smaller competitors, and sees a rebound in Gulf of Mexico production as a positive for Genesis Energy (GEL +5.8%).
- With additional liquified petroleum gas export capacity online in 2016 and the prospect for a more normalized 2016-17 winter, the propane market should tighten relative to a sloppy 2015, which Birnbaum believes will benefit Enterprise Products Partners (EPD +3.5%), Targa Resources (TRGP +1.1%), DCP Midstream Partners (DPM +6.8%) and NGL Energy Partners (NGL -0.1%).
- ETFs: AMLP, AMJ, KYN, YMLP, TYG, SRV, KYE, CEM, MLPI, NML, FEN, NTG, MLPA, KMF, EMLP, FMO, FEI, JMF, MLPN, SRF, CBA, MLPG, MLPX, GMZ, EMO, MLPS, MLPY, TTP, CTR, AMZA, GER, ZMLP, CEN, YMLI, AMU, SMM, MIE, DSE, FPL, ENFR, ATMP, JMLP, MLPC, MLPW, IMLP
Wed, Mar. 2, 6:30 AM| Wed, Mar. 2, 6:30 AM
- February monthly performance was: +2.35%
- 52-week performance vs. the S&P 500 is: -4%
- $0.09 in dividends were paid in February
- Top 10 Holdings as of 1/29/2016: Cal-Maine Foods Inc (CALM): 1.43%, Targa Resources Corp (TRGP): 1.24%, Covanta Holding Corp (CVA): 1.02%, Innoviva Inc (INVA): 0.95%, Pattern Energy Group Inc Class A (PEGI): 0.85%, Regal Entertainment Group (RGC): 0.84%, ALLETE Inc (ALE): 0.83%, Black Hills Corp (BKH): 0.76%, Laclede Group Inc (LG): 0.75%, WisdomTree MidCap Dividend ETF (DON): 0.74%
Fri, Feb. 26, 2:58 PM
- Targa Resources (TRGP +5.2%) is upgraded to Neutral from Underperform with a $33 price target at Credit Suisse.
- The firm says TRGP's issuance of $500M of preferred units takes pro-forma leverage for bank covenant purposes to 3.6x and total pro-forma for year-end 2015 to 4.3x, as well as projected distribution coverage to 1.0x for 2016 1.2x in 2017 and 1.3x in 2018 assuming a flat outlook.
- TRGP shares have jumped 15% since releasing its Q4 results, which included a 24% Y/Y EBITDA increase to $324.7M, and FY 2015 EBITDA of $1.19B compared to $970M for 2014.
Thu, Feb. 25, 7:12 AM
Tue, Feb. 2, 9:00 AM| Tue, Feb. 2, 9:00 AM
- January monthly performance was: -5.46%
- 52-week performance vs. the S&P 500 is: -9%
- $0.15 in dividends were paid in January
- Top 10 Holdings as of 12/31/2015: Targa Resources Corp (TRGP): 1.4%, Cal-Maine Foods Inc (CALM): 1.23%, Covanta Holding Corp (CVA): 1.04%, Theravance Inc (THRX): 0.94%, Pattern Energy Group Inc Class A (PEGI): 0.88%, Regal Entertainment Group (RGC): 0.86%, ALLETE Inc (ALE): 0.74%, WisdomTree MidCap Dividend ETF (DON): 0.73%, Black Hills Corp (BKH): 0.67%, Laclede Group Inc (LG): 0.65%
Tue, Jan. 19, 11:33 PM
- Targa Resources (NYSE:TRGP) declares $0.91/share quarterly dividend, in line with previous.
- Forward yield 22.72%
- Payable Feb. 9; for shareholders of record Feb. 2; ex-div Jan. 29.
Pro-Targa Resources Corp. provides midstream natural gas and natural gas liquids services. The company engaged in the business of gathering, compressing, treating, processing, and selling natural gas and storing, fractionating, treating, transporting, and selling NGLs and NGL products. It also... More
Industry: Gas Utilities
Country: United States
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