We published our quarterly Midstream Metrics update highlighting the most important topics from the recent midstream energy earnings season.
We summarize the most recent distribution statistics and point out the most relevant increases we received from the companies in our portfolio. We believe investing in companies with high current income, growth of income, and financial strength, so this topic is always one of the most important to us.
These are the hottest topics, including management teams’ discussions, project updates, industry developments, and the most important news we heard during the quarter–the outlook for crude oil, refined products, and natural gas, for instance. We include a graph related to these topics, which we believe investors will find enlightening.
Lastly, we have several tables covering EBITDA, distribution growth, free cash flow, operating income, and debt metrics. We believe these charts provide a good overview of the last quarter’s numbers and how holdings in the portfolio are positioned.
Leverage continues to decline and shareholders are being rewarded through the combination of higher distributions and share buybacks. In addition, strong free cash flow coverage ratios, which we view as being an important indicator, are supportive of current distributions and the potential for distribution increases.
In addition, despite two years of strong performance, valuations remain compelling. In fact, we believe current valuations do not reflect the improvement in industry fundamentals.
The sector’s improved financial position, including stronger balance sheets, less reliance on debt and equity markets to finance growth projects, and most importantly, vastly improved free cash flow yields, point to a better investment.