Equitrans Midstream: Doubling Down As Their Dividends Get Safer

Summary

• Despite their flagship Mountain Valley Pipeline project facing another setback, Equitrans Midstream still sustained its high 7% dividend yield.
• Whilst positive, at the time risks still remained, the bigger of which stemmed from their credit facility covenant that saw its leverage ratio limit decrease following the end of 2022.
• They risked breaching this limit but thankfully, they have now been provided relief from their lenders with a new higher limit that they should not breach.
• When looking elsewhere, they saw a weak start to 2022 but given their decent guidance for the full year, this does not appear too concerning.
• Since the bigger of the risks is now resolved, I believe that upgrading to a strong buy rating is appropriate as I consider doubling down on my investment.

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Introduction

Even though Equitrans Midstream (ETRN) saw another setback on their flagship Mountain Valley Pipeline project earlier in 2022, hereon referred to as their MVP project, thankfully their dividends were sustained, despite risks still lurking later in 2022, as

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ETRN either through stock ownership, options, or other derivatives. 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.