Equitrans: This High-Yielding Midstream Company Is Attractive But Risky

Summary

  • Equitrans Midstream is one of the few natural gas-focused midstream companies operating in the Appalachian region.
  • The company has an incredibly attractive contract with EQT that guarantees significant cash flow growth over the next eighteen months.
  • Equitrans likely has some growth prospects beyond this as the demand for natural gas is expected to grow over the next two decades.
  • The company's financial structure leaves a lot to be desired as it is carrying an incredibly high amount of debt given its cash flow.
  • The 8.69% yield is probably sustainable, but there may be some risks of a cut here if the growth story does not perfectly play out.
  • This idea was discussed in more depth with members of my private investing community, Energy Profits in Dividends. Learn More »

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Equitrans Midstream Corporation (ETRN) is a midsized natural gas-focused midstream company that operates throughout the Appalachian region. This makes it somewhat unique among the midstream firms as it is one of the only ones that is exclusively focused on

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This article was written by

15.65K Followers

Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.

He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.

Analyst’s 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.

I am long various energy-focused mutual funds that may contain any stock mentioned in this article. I exercise no control over the contents of these funds. This article was originally published to Energy Profits in Dividends after the market closed on July 11, 2022. Subscribers to the service have had since that time to act upon it.

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