Kinetik Holdings: M&A Deals And A 7.2% Yield Spells Profits

Ronald Ferrie
3.3K Followers

Summary

  • Kinetik's recent acquisition of Durango Midstream is a lucrative EBITDA boosting transaction.
  • The deal also opens several expansion opportunities for Kinetik.
  • The dividend has an ample safety margin and the company is taxed as a C-Corp.
  • I expect over 20% share appreciation as the full value of the acquisition is realized by the broader market.

Two workers looking at a clipboard in the foreground with onshore oil pumps above oil wells (nodding donkeys/pumpjacks) in the background

Monty Rakusen

Thesis

Kinetik Holdings (NYSE:KNTK) is a natural gas focused midstream company that operates in the Delaware basin of the Permian. The company recently announced Q1 earnings results, as well as a strategic acquisition of Durango Midstream

This article was written by

3.3K Followers
I am a Licensed Professional Engineer who works in the Nuclear Power industry. I use my professional working knowledge of the power/energy industries to aid in evaluating potential equities worthy of long-term investment. I invest in income producing equities and rental real estate properties for cash flow and long-term appreciation. My articles are to serve as a platform for presenting the underlying fundamentals and long-term potential of each equity/business.

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.

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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