One reason many analysts may have a liking for Enterprise Products Partners stock might be its distribution coverage ratio. This ratio is well above 1 times, making it relatively less risky among the MLPs.
Investors receive a 7.22% distribution. The $33 UBS price target compares with the $31.64 consensus target for the stock and Friday’s close at $26.70.
ONEOK
The solid price of natural gas over the past year has helped to lift this top energy company. ONEOK Inc. (NYSE: OKE) primarily engages in natural gas transportation, storage and natural gas and NGLs gathering, processing and fractionation in the Bakken, Mid-Continent and Permian. The company recently closed the roll-up of its underlying MLP, ONEOK Partners.
The company has a strong presence in the Oklahoma SCOOP/STACK (NGL gathering/takeaway system, G&P), the Williston Basin (G&P, NGL takeaway) and the Permian Basin (NGL gathering, NGL takeaway, natural gas takeaway), which analysts feel provides higheturn growth opportunities.
Many on Wall Street remain positive on the company’s primarily fee-based earnings, which account for 90% of total earnings.
ONEOK stock comes with a 6.28% dividend. Raymond James has set a $75 price target, and the consensus target is $69.29. The shares closed at $62.49 on Friday.
Pioneer Natural Resources
Many Wall Street analysts love this stock as a pure crude oil play and, the company also is looking to employ variable dividends. Pioneer Natural Resources Co. (NYSE: PXD) operates as an independent oil and gas exploration and production company in the United States.
The company explores for, develops and produces oil, NGLs and natural gas. It has operations in the Midland Basin in West Texas. As of December 31, 2021, the company had proved undeveloped reserves and proved developed non-producing reserves of 130 million barrels of oil, 92 million barrels of NGLs and 462 billion cubic feet of gas, and it owned interests in 11 gas processing plants.
Pioneer production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole and offshore wireline units, and a range of advanced coiled tubing units.
Pioneer is a huge player in the Permian basin and the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second-largest oil reservoir in the Midland Basin. With a stellar balance sheet, the company is poised to remain a top player in the Permian, as it expects to deliver solid production growth in 2022 and beyond.
Investors receive an 8.49% dividend, which may vary from quarter to quarter. The Pioneer Natural Resources target price at Piper Sandler is $339 target price. That is well above the $286.90 consensus target and the most recent close at $239.62.
While not all these stocks are pure oil plays, they will benefit from any increase in the cost of a barrel of oil. The LNG companies will play a big role this winter after Russia cut off natural gas supplies to Europe, and energy MLPs most certainly will benefit from higher prices, as they move both oil and gas around the energy complex and infrastructure.
Originally posted at 24/7 Wall St.
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