Western Gas Partners: Very Close To A Buy Recommendation

| About: Western Gas (WES)
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Western Gas Partners, L.P. (NYSE:WES) acquires, owns and operates midstream energy assets in east and west Texas, the Rocky Mountains and mid-continent. It gathers, treats and transports natural gas form its parent, Anadarko Petroleum Co. (NYSE:APC). The partnership has grown profits and dividends at a 17%+ rate over the last four years while earning a 10-11% return on equity. While the rate of increase in profits and dividends will slow in the future, the partnership should continue to grow at a sound rate because of:

(1) a very secure customer base [i.e. its parent],

(2) acquisitions.


(1) fluctuations in commodity prices,

(2) demand is subject to seasonal and weather factors,

(3) potential impact of new energy regulations.

WES is rated A by Value Line, has a 31% debt to equity ratio and its stock yields 3.9%.

Statistical Summary


Stock Yield Dividend Growth Rate Payout Ratio # Increases Since 2008
WES 3.9% 9% 73% 3
IND* 4.4 4 63 NA

Debt/Equity ROE EPS Down Since 2008 Net Margin Value Line Rating
WES 66% 31% 1 47% A
IND* 89 13 NA 9 NA

*IND is the average of the Pipeline MLPs Industry as compiled by Value Line

Note: WES stock made great progress off its October 2008 low, quickly surpassing the downtrend off its June 2008 high (red line) and the November 2008 trading high (green line). Long term the stock is in an uptrend (straight blue lines). Intermediate term, it is in a trading range (purple lines). The wiggly blue line is on balance volume. The High Yield Portfolio does not own a position in WES. The upper boundary of its Buy Value Range is $43; the lower boundary of its Sell Half Range is $51.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in WES over the next 72 hours.