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EQT Midstream Has Plenty Of Work In The Pipeline, No Puns Intended

Todd Akin profile picture
Todd Akin


  • EQT is trading at a discount due to overall market weakness, not company-specific problems.
  • The company has multiple projects planned for the future to increase earnings and dividend growth.
  • Therefore, investors should stay long shares of EQT for its stock price appreciation potential and growing dividend payouts.

EQT Midstream Partners LP (NYSE:EQM) has fallen alongside the rest of the midstream sector, implying that its share price performance is not necessarily indicative of actual company fundamentals.

EQT has plenty of catalysts on the horizon to drive future earnings, including MVP, Hammerhead, the Equitrans Expansion Project, and MVP Southgate.

All of these projects should drive significant EBITDA for EQT through 2020 and should mostly be done through cash flows, instead of issuing shares, which eliminates risks of being diluted. Furthermore, the increase in earnings will also allow for stronger dividend coverage, and even possibilities to raise its dividend.

So, the current backlog available to EQT should not only drive significant earnings for the company in the future but should also strengthen its cash position and help ensure the sustainability of its unusually high dividend of 9.88%.

Also, the stock is off over $30 points from its highs and trades at only 10x earnings. As a result, investors should stay long EQT for the combination of its strong stock price appreciation potential and dividend growth expectations.

EQT Has Multiple Projects In The Pipeline

As alluded to above, EQT has multiple projects in the works to drive future earnings, including the Mountain Valley Pipeline (MVP for short), Hammerhead, Southgate MVP, and the Equitrans Expansion Project, to name a few.

50% of the highly anticipated, Mountain Valley pipeline was completed last winter, according to the Q3 conference call. But what is needed to finish are nationwide permits which were vacated by the Fourth Circuit Court of Appeals during the fall of 2018.

Thankfully, the revised nationwide 12 permits issued by the Army Corps of Engineers are expected to be in hand for EQT by early 2019, which will allow the company to complete the other half of the pipeline.

Hammerhead, which will connect

This article was written by

Todd Akin profile picture
Graduated from the University of Houston- Downtown with a degree in Finance. My site, Wallstreetstocksolutions.com, focuses on portfolio management and unique investment opportunities.

Analyst’s Disclosure: I am/we are long AMZA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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