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Here's Why You Should Retain Cheniere Partners (CQP) Stock
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Cheniere Energy Partners, L.P. (CQP - Free Report) has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering an average surprise of 28.8%.
What’s Favoring the Stock?
Cheniere Partners holds a strong market position as a leading LNG exporter in the United States. The company’s Sabine Pass LNG terminal, with a production capacity of approximately 30 Mtpa, positions it favorably to capitalize on the growing global demand for LNG. The terminal’s strategic location and connectivity to major pipelines further enhance its competitive advantage.
Cheniere Partners boasts a robust liquidity position, which includes $2.1 billion in total available liquidity as of Mar 31, 2024. This liquidity is composed of $333 million in cash and cash equivalents, $59 million in restricted cash, and substantial available commitments under credit facilities. This strong liquidity enables the partnership to manage its operations smoothly and invest in growth opportunities without facing financial constraints.
Cheniere Partners has a history of providing consistent cash distributions to its unitholders. For the first quarter of 2024, the partnership declared a cash distribution of 81 cents per common unit, reconfirming its 2024 distribution guidance of $3.15-$3.35 per common unit. This stable and predictable income stream is appealing to income-focused investors seeking reliable returns.
The partnership is actively pursuing strategic expansion projects to enhance its production capacity. The SPL Expansion Project, which aims to add approximately 20 million tons per annum of LNG production capacity, demonstrates Cheniere Partners’ commitment to growth. The expansion is supported by applications submitted to the Federal Energy Regulatory Commission and the Department of Energy for necessary authorizations.
Cheniere Partners continues to exhibit strong operational performance, evidenced by the export of 114 LNG cargoes totaling 418 TBtu in the first quarter of 2024. This represents a 2% increase in cargo and a 4% increase in volume compared to the same period in 2023. The consistent growth in LNG exports underscores the partnership’s operational efficiency and its ability to meet global LNG demand.
The partnership’s commitment to prudent capital allocation is evident from its decision to prepay $150 million in principal amount of its 5.750% Senior Secured Notes due 2024 with cash on hand. This move not only reduces financial leverage but also demonstrates Cheniere Partners’ focus on maintaining a healthy balance sheet and optimizing capital structure.
Risks
The Zacks Rank #3 (Hold) partnership has been offering lower dividends to its investors, which may not be attractive to those seeking consistent income from their investments.
USA Compression Partners, LP (USAC - Free Report) is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. USA Compression Partners earns its revenues from the overall horsepower use of natural gas transported rather than the price. As such, the partnership is largely insulated from fluctuations in commodity prices.
The Zacks Consensus Estimate for USAC’s 2024 and 2025 earnings per share (EPS) is pegged at 77 cents and 98 cents, respectively. The company has a Zacks Style Score of B for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Enterprise Products Partners (EPD - Free Report) is among the leading midstream energy players in North America. It has an extensive network of pipelines that spreads across more than 50,000 miles.
The Zacks Consensus Estimate for EPD’s 2024 and 2025 EPS is pegged at $2.71 and $2.87, respectively. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
ProPetro Holding Corporation (PUMP - Free Report) is an oilfield services provider operating primarily in the Permian Basin spread over West Texas and New Mexico. ProPetro's strategic transition to next-generation equipment, including FORCE electric fleets, underscores its market leadership and cutting-edge technology.
The Zacks Consensus Estimate for PUMP’s 2024 and 2025 EPS is pegged at 67 cents and 83 cents, respectively. The company has a Zacks Style Score of A for Value and B for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
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Here's Why You Should Retain Cheniere Partners (CQP) Stock
Cheniere Energy Partners, L.P. (CQP - Free Report) has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering an average surprise of 28.8%.
What’s Favoring the Stock?
Cheniere Partners holds a strong market position as a leading LNG exporter in the United States. The company’s Sabine Pass LNG terminal, with a production capacity of approximately 30 Mtpa, positions it favorably to capitalize on the growing global demand for LNG. The terminal’s strategic location and connectivity to major pipelines further enhance its competitive advantage.
Cheniere Partners boasts a robust liquidity position, which includes $2.1 billion in total available liquidity as of Mar 31, 2024. This liquidity is composed of $333 million in cash and cash equivalents, $59 million in restricted cash, and substantial available commitments under credit facilities. This strong liquidity enables the partnership to manage its operations smoothly and invest in growth opportunities without facing financial constraints.
Cheniere Partners has a history of providing consistent cash distributions to its unitholders. For the first quarter of 2024, the partnership declared a cash distribution of 81 cents per common unit, reconfirming its 2024 distribution guidance of $3.15-$3.35 per common unit. This stable and predictable income stream is appealing to income-focused investors seeking reliable returns.
The partnership is actively pursuing strategic expansion projects to enhance its production capacity. The SPL Expansion Project, which aims to add approximately 20 million tons per annum of LNG production capacity, demonstrates Cheniere Partners’ commitment to growth. The expansion is supported by applications submitted to the Federal Energy Regulatory Commission and the Department of Energy for necessary authorizations.
Cheniere Partners continues to exhibit strong operational performance, evidenced by the export of 114 LNG cargoes totaling 418 TBtu in the first quarter of 2024. This represents a 2% increase in cargo and a 4% increase in volume compared to the same period in 2023. The consistent growth in LNG exports underscores the partnership’s operational efficiency and its ability to meet global LNG demand.
The partnership’s commitment to prudent capital allocation is evident from its decision to prepay $150 million in principal amount of its 5.750% Senior Secured Notes due 2024 with cash on hand. This move not only reduces financial leverage but also demonstrates Cheniere Partners’ focus on maintaining a healthy balance sheet and optimizing capital structure.
Risks
The Zacks Rank #3 (Hold) partnership has been offering lower dividends to its investors, which may not be attractive to those seeking consistent income from their investments.
Key Picks
Investors interested in the energy sector may look at some better-ranked companies mentioned below. The three companies presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
USA Compression Partners, LP (USAC - Free Report) is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. USA Compression Partners earns its revenues from the overall horsepower use of natural gas transported rather than the price. As such, the partnership is largely insulated from fluctuations in commodity prices.
The Zacks Consensus Estimate for USAC’s 2024 and 2025 earnings per share (EPS) is pegged at 77 cents and 98 cents, respectively. The company has a Zacks Style Score of B for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Enterprise Products Partners (EPD - Free Report) is among the leading midstream energy players in North America. It has an extensive network of pipelines that spreads across more than 50,000 miles.
The Zacks Consensus Estimate for EPD’s 2024 and 2025 EPS is pegged at $2.71 and $2.87, respectively. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
ProPetro Holding Corporation (PUMP - Free Report) is an oilfield services provider operating primarily in the Permian Basin spread over West Texas and New Mexico. ProPetro's strategic transition to next-generation equipment, including FORCE electric fleets, underscores its market leadership and cutting-edge technology.
The Zacks Consensus Estimate for PUMP’s 2024 and 2025 EPS is pegged at 67 cents and 83 cents, respectively. The company has a Zacks Style Score of A for Value and B for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.