Energy

4 Companies That Investors Want Most to Meet With at Huge RBC MLP Conference

Lee Jackson

Published: November 18, 2015 11:10 am

Last Updated: January 13, 2020 5:03 pm

If any sector can elicit varying feeling and responses, it’s the energy master limited partnerships (MLPs). With the popular RBC MLP conference on tap for this week in Dallas, registration for the event reportedly is up 35% from 2014 and at an all-time high, with over 400 total attendees. With 200 or more institutional registrants, and 150 top executives from over 50 companies attending, there will be lots of questions, and companies will have a chance to showcase their strengths.

In a new research note, RBC had some very interesting anecdotal data from the “sentiment survey” investors and management at the top companies filled out. The report also had the companies listed that were receiving the most requests for one-on-one meetings. Here we highlight the four companies investors want to talk to the most. Investors should keep in mind that MLP distributions can contain return of principal.

Targa Resources Partners

The company was formed in October 2006 by its parent, Targa Resources, to own, operate, acquire and develop a diversified portfolio of complementary midstream energy assets. Targa Resources Partners L.P. (NYSE: NGLS) is a leading provider of midstream natural gas and natural gas liquid (NGL) services in the United States, with a growing presence in crude oil gathering and petroleum terminaling.

ALSO READ: 6 Big Dividend Hikes Expected Before Year-End

The partnership is engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling NGLs and NGL products, including services to liquefied petroleum gas (LPG) exporters; gathering, storing and terminaling crude oil; and storing, terminaling and selling refined petroleum products.

Investors receive a monster 13.11% distribution. The Thomson/First Call consensus price target is $38.94. The shares closed most recently at $26.16.
SemGroup

This company is a little off the radar but getting many requests for meetings. SemGroup Corp. (NYSE: SEMG) provides the energy industry the means to move products from the wellhead to the wholesale marketplace. It provides diversified services for end-users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy.

SemGroup operates through six segments: Crude, SemStream, SemLogistics, SemCAMS, SemMexico and SemGas. The Crude segment conducts crude oil transportation, storage, terminaling, gathering and marketing operations in Colorado, Kansas, Louisiana, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Texas and Wyoming.

Investors are paid a 5.35% distribution. The consensus price target is a whopping $63.67. The stock closed Tuesday at $35.65.

Plains All American Pipeline

This is a top stock that Wall Street feels has had the power to withstand the energy downturn. Plains All American Pipeline L.P. (NYSE: PAA) owns and operates midstream energy infrastructure and provides logistics services for crude oil, NGLs, natural gas and refined products. It owns an extensive network of pipeline transportation, terminaling, storage and gathering assets in key crude oil and NGL producing basins and transportation corridors and at major market hubs in the United States and Canada. On average, Plains All American handles over 4.1 million barrels per day of crude oil and NGL on its pipelines.

ALSO READ: Cowen Has 3 Telecom Tech Stocks With Big 2016 Upside Potential

The company also has one of the largest storage asset bases, with over 120 million barrels of liquids storage capacity at three major hubs, which are located in Cushing, Okla., Midland, Texas, and Patoka, Ill.

Investors receive a very huge 10.7% distribution. The consensus price target is $38.60. The shares closed Tuesday at $26.32.

Kinder Morgan

This company has been rocked and insiders have bought big blocks of the stock at current prices and higher. Kinder Morgan Inc. (NYSE: KMI) is the largest energy infrastructure company in North America. It owns an interest in or operates approximately 84,000 miles of pipelines and 165 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials like coal and petroleum coke. Kinder Morgan is the largest midstream and third largest energy company in North America, with an enterprise value of approximately $115 billion.

In an interview last summer Richard Kinder the respected leader of the company said that mergers and acquisitions could still be in store as prices have become increasingly opportunistic. He said the MLP giant wouldn’t be making any foolish buys, but that tremendous opportunity could lie in Mexico in the pipeline system there, where the company already has one pipeline.

Kinder Morgan investors are paid an incredible 8.8% distribution. The consensus target price is $38.75. Shares closed Tuesday at $23.36.

ALSO READ: 3 Defense Stocks to Buy Likely to See Increased Spending After Paris Attacks

All these companies have been killed as the energy sector is well into the second year of industry struggles. The important thing for investors to remember is the opportunity to own these industry leaders at current trading levels could be a once-in-a-lifetime opportunity for patient long-term accounts.