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Q1 20 MLP/Midstream Dividend Recap: Putting Cuts In Context

Published Fri, 22 May 2020 08:00:30 -0400 on Seeking Alpha

With midstream companies revising their dividend policies in response to macro headwinds, 16 MLPs in the AMZ, 12 MLPs in the AMZI, and 14 midstream companies in the AMEI cut their dividends quarter over quarter. Altogether, 21 out of 48 dividend-paying midstream companies reduced their payouts for 1Q20.
Although 1Q20 was undoubtedly a difficult quarter for the midstream space in terms of the absolute number of cuts, the majority of companies in the AMZ, AMZI, and AMEI by weighting maintained or even grew their dividends on both a quarter-over-quarter and year-over-year basis.
Diversified midstream companies have been well-positioned to absorb the impact of the current downturn as a result of having better financial positioning overall, higher exposure to fee-based activities, contract protections such as minimum volume commitments, and a diversified asset base.

COVID-19 challenges result in numerous sequential dividend cuts for midstream. The pie charts below show the quarter-over-quarter (Q/Q) changes to distributions/dividends for the constituents of the Alerian MLP Index (AMZ), Alerian MLP Infrastructure Index (AMZI), and Alerian Midstream Energy Select Index (AMEI) by comparing 1Q20 with 4Q19. To be clear, 1Q20 dividends refer to the dividends that will be paid in 2Q20 as a result of operational performance in 1Q20. For the constituents of the AMEI that pay monthly dividends - Inter Pipeline (OTCPK: IPPLF), Keyera (OTCPK: KEYUF), and Pembina Pipeline (NYSE: PBA) - the dividend for April 2020 was compared with the declaration for January. AMEI constituents Cheniere Energy (NYSEMKT:LNG) and Tellurian (Nasdaq: TELL) do not pay a dividend.

Dividend cuts were common for 1Q20 as midstream companies revised their dividend policies in response to headwinds caused by the COVID-19 pandemic and commodity price volatility, with many focused on financial flexibility and shoring up their balance sheets. For 1Q20, 16 MLPs in the AMZ, 12 MLPs in the AMZI, and 14... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
MARTIN MIDSTREAM PARTNERS 4.19   0.0 0.00 1.00 24.39
SUMMIT MIDSTREAM PARTNERS LP 5.06   12.0 0.42 1.15 21.91
DELEK LOGISTICS PARTNERS LP 30.70   12.5 2.46 3.40 11.22
GENESIS ENERGY LP 21.10   0.0 -0.35 2.20 10.30
MACQUARIE INFRASTRUCTURE 39.63   34.2 1.16 4.00 10.04
TARGA RESOURCES 39.28   0.0 -1.32 3.64 9.30
OCCIDENTAL PETROLEUM 45.40   9.0 5.05 3.16 6.81
TC PIPELINES LP 38.43   0.0 -2.98 2.60 6.79
CHENIERE ENERGY PARTNERS LP 44.55   0.0 0.00 2.44 5.48
ROYAL DUTCH SHELL A 68.62   27.1 2.59 3.76 5.35
ROYAL DUTCH SHELL B 70.13   0.0 0.00 3.76 5.23
KINDER MORGAN 20.42   20.6 0.99 1.00 4.94
PEMBINA PIPELINE 36.91   16.1 2.29 1.80 4.86
MURPHY OIL 20.42   10.7 1.91 1.00 4.79
HALLIBURTON 19.75   13.0 1.52 0.72 3.59
EQT 12.29   0.0 -1.41 0.12 1.02
KEYERA FACILITIES INCOME FUND 25.27   0.0 0.00 0.00 0.00
CHENIERE ENERGY 64.10   0.0 0.00 0.00 0.00


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