USA Compression Partners: Their Near-10% Yield Is Now Secured

Summary

• USA Compression Partners narrowly avoided cutting their distributions back in 2021.
• As 2022 progressed, their recovery continued gaining momentum on the back of the otherwise tragic Russia-Ukraine war.
• In the fourth quarter, their underlying operating cash flow that excludes working capital movements posted its highest result since at least the beginning of 2021.
• Even better, their guidance for 2023 points to earnings growth of circa 20% year-on-year, which now leaves their distributions safe for the first time in years.
• Since I expect this will also translate into a higher unit price, I believe that maintaining my strong buy rating is appropriate.

Aslan Alphan

Introduction

The last three years were a roller coaster for USA Compression Partners (NYSE:USAC) who narrowly avoided a distribution cut, before subsequently seeing a game-changer after Russia invaded Ukraine and as my previous article highlighted, there was

Analyst’s Disclosure:I/we have a beneficial long position in the shares of USAC 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.