For immediate release
Chicago, IL – April 08, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include The Williams Companies, Inc. WMB, MPLX LP MPLX and Pembina Pipeline Corp. PBA
Here are highlights from Thursday’s analyst blog:
3 Midstream Companies to Combat Oil and Gas Price Volatility
The volatility of oil and gas prices sometimes convinces investors to allocate money to energy companies. The market has witnessed extreme volatility in commodity prices, with oil and gas prices surging from pandemic record highs to very high levels, with the recent surge supported by the violent and unprovoked invasion of Ukraine by Russia. However, investors should not worry too much as some energy players are relatively insulated from the extreme volatility of commodity prices.
Volatility of oil and gas prices
Although oil and natural gas prices have improved significantly over the past year, by its very nature, the commodity price scenario remains volatile. As the fate of exploration and production companies is directly proportional to oil and gas prices, the activities of energy players are highly exposed to the volatility of commodity prices.
The business environment for upstream players is currently favorable as oil and gas prices are high, but a drop in prices will affect companies’ cash flow.
Actions to combat volatility
Not all energy companies are exposed to commodity price volatility. Companies or partnerships operating oil and gas pipelines and storage facilities are relatively better positioned to weather price volatility.
Indeed, energy midstream players generate stable revenues based on royalties for their transmission and storage assets contracted by shippers for a long period of time. Using our proprietary stock screener, we pre-selected three middle players that investors could bet on to combat volatility. One of the stocks sports a Zacks rank #1 (strong buy), while the other two players carry a Zacks rank #2 (buy). You can see the full list of today’s Zacks #1 Rank stocks here.
The Williams Companies, Inc. is the operator of pipeline assets spanning more than 30,000 miles. The Williams Companies generates stable cash flow because its midstream infrastructure processes 30% of the natural gas consumed each day in the United States.
WMB is not only focused on strengthening its balance sheet but also mindful of capital discipline. Over the past 30 days, The Williams Companies, with a Zacks ranking of 1, has witnessed upward revisions to earnings estimates for 2022.
Another well-known name in midspace is MPLX-LP. The partnership generates stable cash flows, supported by its extensive network of crude oil and refined petroleum product pipelines. MPLX LP’s assets also include natural gas and NGL processing and fractionation facilities.
MPLX, with a Zacks ranking of 2, has a low-cost corporate culture and strict capital discipline. Over the past 30 days, MPLX LP has witnessed upward revisions to earnings estimates for 2022.
Pembina Pipeline Corp., a leading name in the midstream, has served the energy industry in North America for over 65 years. The Pembina Pipeline pipeline system spans more than 18,000 kilometres.
In 2022 and 2023, No. 2 Pembina Pipeline is expected to see year-over-year earnings growth of 39.6% and 6.5%, respectively.
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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.
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Williams Companies, Inc. The (WMB): Free Stock Analysis Report
MPLX LP (MPLX): Free Stock Analysis Report
Pembina Pipeline Corp. (PBA): Free Stock Analysis Report
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