NuStar Energy: More Of The Same In 2022

Apr. 20, 2022 10:52 AM ETNuStar Energy L.P. (NS)NS.PA, NS.PB, NS.PC11 Comments
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  • Despite operating conditions having broadly recovered by the second half of 2021, the distributions of NuStar Energy remained risky.
  • They see thin distribution coverage, which as a result sees little excess free cash flow after distribution payments.
  • Disappointingly, their guidance for 2022 indicates that this should not improve to any material extent.
  • Despite making a divestiture, their leverage remains very high and given their continued outlook for thin distribution coverage, this also appears unlikely to change.
  • Whilst 2022 offers more of the same, at least the worst appears over and thus I believe that upgrading my previous sell rating to a hold rating is now appropriate.

Oil Storage tank in the port in Tsing Yi, Hong Kong

CHUNYIP WONG/E+ via Getty Images


Despite the worst of the severe economic downturn of 2020 sitting in the rear-view mirror heading into the second half of 2021, there were even higher stakes heading into third-quarter earnings season for the

NuStar Energy Ratings


NuStar Energy Cash Flows


NuStar Energy Capital Structure


NuStar Energy Leverage Ratios


NuStar Energy Liquidity Ratios


NuStar Energy Debt Maturities

NuStar Energy 2021 10-K

This article was written by

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My analysis primarily focuses on income investments with a preference for those sporting high and very high yields.  This space often contains value traps, although it also contains very desirable opportunities that have the potential to generate significant alpha for investors.  I endeavor to help investors make their own investment selections by providing my insights into financial information released by companies in the context of the current economic outlook.  Whilst I offer ratings via this site, these should not be taken as financial advice nor to proceed with a particular investment.  Apart from my extensive personal investment experience that spans over a decade, I have also obtained a Bachelor degree with Honours majoring in Finance, minoring in Accounting.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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