While the overall stock market has gone straight down this year, and there is a good chance that we have more damage awaiting us, one sector that continues to bring home the bacon is energy. With both Brent and West Texas Intermediate crude pushing toward the $125 a barrel level, and natural gas running hot all year with some of the highest price prints since 2008, many of the top energy companies are poised to have a very strong second half of 2022.
The current administration, and many others around the world, are adamantly opposed to fossil fuels. Many of the big producers, sensing ESG pressures, decided to focus on free cash flow and returning profits to shareholders via dividends and stock buybacks, instead of increasing production. While some recent news reports suggest that U.S. shale drillers are ready to increase production in July, the journey from in-the-ground to the gas tank is not a quick one. The reality is that, despite the high prices consumer are experiencing now, summertime is vacation time and millions of Americans are ready to hit the road.
We screened our 24/7 Wall St. energy master limited partnership (MLP) research universe looking for those with big and dependable distributions that still have room to run. We found seven that are Buy rated on Wall Street and are solid ideas now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Antero Midstream
With shares trading near $10 apiece, this very wellun company offers a huge total return package. Antero Midstream Corp. (NYSE: AM) owns, operates and develops midstream energy infrastructure. It operates through two segments.
The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collects and processes production from Antero Resources’ wells in West Virginia and Ohio.
The Water Handling segment delivers fresh water and offers other fluid handling services, such as wastewater transportation, disposal and treatment, as well as highate transfer services.
Antero Midstream stock investors receive a 9.07% distribution. Wells Fargo recently lifted its $12 target price to $13. The consensus target is $10.71, and shares closed on Tuesday at $9.92.
Energy Transfer
This top MLP is a very safe way for investors looking for energy exposure and income. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all the major domestic production basins.
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