We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Williams Partners Concludes Geismar Olefins Unit Divestment
Read MoreHide Full Article
Midstream infrastructure provider Williams Partners LP recently concluded the divestment of its 100% membership stake in Williams Olefins to NOVA Chemicals. It is to be noted that Williams Olefins controls 88.46% ownership in the Geismar, LA, olefins unit and related facilities.
Williams Partners received $2.1 billion in cash which will likely get utilized for financing growth projects and also for clearing $850 million in term loan. On top of that, along with the closure of the divestment, affiliates of Williams Partners have inked accords with NOVA Chemicals for supplying feedstock to the Geismar olefins plant for a long period of time through the U.S. Gulf Coast ethane pipeline system.
We appreciate the sale of the Olefins plant as it reflects the partnership’s strategy of shifting focus primarily toward the stable fee-based natural gas transportation business. The agreements are also backing Williams Partners’ stable fee-based income for a length of time. Investors should know that the partnership expects 97% of its future gross margin to be generated from fee-based operations.
Tulsa, OK-based Williams Partners is a publicly traded master limited partnership with midstream infrastructure assets that are involved in transporting, gathering and processing natural gas and natural gas liquids. The partnership’s natural gas infrastructure assets comprise the fastest growing pipeline networks that carry the highest volumes of natural gas in the U.S. from the best supply basins in North America.
However, we are concerned about Williams Partners’ high debt level, which makes it vulnerable to an extended drop in commodity prices. Also, the stock has underperformed the Zacks categorized Energy & Pipeline Mlp industry over the last one year. During the aforesaid period, the partnership gained 12.4% as compared with a 14% gain of the broader industry.
Zacks Rank & Stocks to Consider
Williams Partners currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
A few better-ranked players in the energy sector are Canadian Natural Resources Limited (CNQ - Free Report) , Pembina Pipeline Corporation (PBA - Free Report) and W&T Offshore Inc. (WTI - Free Report) . Canadian Natural and Pembina Pipeline sport a Zacks Rank #1 (Strong Buy), while W&T Offshore carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
We expect year-over-year earnings growth of almost 725% at Canadian Natural in 2017.
Pembina Pipeline’s 2017 earnings will likely grow over 87% year over year.
W&T Offshore had an average positive earnings surprise of 69.21% for the last four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Williams Partners Concludes Geismar Olefins Unit Divestment
Midstream infrastructure provider Williams Partners LP recently concluded the divestment of its 100% membership stake in Williams Olefins to NOVA Chemicals. It is to be noted that Williams Olefins controls 88.46% ownership in the Geismar, LA, olefins unit and related facilities.
Williams Partners received $2.1 billion in cash which will likely get utilized for financing growth projects and also for clearing $850 million in term loan. On top of that, along with the closure of the divestment, affiliates of Williams Partners have inked accords with NOVA Chemicals for supplying feedstock to the Geismar olefins plant for a long period of time through the U.S. Gulf Coast ethane pipeline system.
We appreciate the sale of the Olefins plant as it reflects the partnership’s strategy of shifting focus primarily toward the stable fee-based natural gas transportation business. The agreements are also backing Williams Partners’ stable fee-based income for a length of time. Investors should know that the partnership expects 97% of its future gross margin to be generated from fee-based operations.
Tulsa, OK-based Williams Partners is a publicly traded master limited partnership with midstream infrastructure assets that are involved in transporting, gathering and processing natural gas and natural gas liquids. The partnership’s natural gas infrastructure assets comprise the fastest growing pipeline networks that carry the highest volumes of natural gas in the U.S. from the best supply basins in North America.
However, we are concerned about Williams Partners’ high debt level, which makes it vulnerable to an extended drop in commodity prices. Also, the stock has underperformed the Zacks categorized Energy & Pipeline Mlp industry over the last one year. During the aforesaid period, the partnership gained 12.4% as compared with a 14% gain of the broader industry.
Zacks Rank & Stocks to Consider
Williams Partners currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
A few better-ranked players in the energy sector are Canadian Natural Resources Limited (CNQ - Free Report) , Pembina Pipeline Corporation (PBA - Free Report) and W&T Offshore Inc. (WTI - Free Report) . Canadian Natural and Pembina Pipeline sport a Zacks Rank #1 (Strong Buy), while W&T Offshore carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
We expect year-over-year earnings growth of almost 725% at Canadian Natural in 2017.
Pembina Pipeline’s 2017 earnings will likely grow over 87% year over year.
W&T Offshore had an average positive earnings surprise of 69.21% for the last four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>