The integrated oil and gas operator, EQT Midstream Partners, LP ( EQM ) touched a 52-week high of $73.43 per unit during the intraday session on April 2, 2014. The unit price finally closed a tad lower at $71.48 with an average traded volume of 0.2 million units.
During the past one-year time frame, EQT Midstream saw a steady uptrend in its unit price, climbing nearly 89% over the period. The current P/E ratio of the company is 25.9, a discount of 4.7% to the peer group average of 27.17.
EQT Midstream Partners also reported strong fourth quarter results. Quarterly earnings surpassed the Zacks Consensus Estimate by 6.9%. Moreover, the partnership has reported positive earnings surprises in all the last four quarters with an average beat of 26.21%. In addition, the long-term estimated earnings per unit growth is pegged at 14.25%.
The partnership has a strong presence in south western Pennsylvania and attracts producers in that region for midstream services. On Feb 14, the partnership entered into an agreement with a subsidiary of Range Resources Corporation ( RRC ) for providing gathering, compression and transmission services in eastern Washington County, PA.
The fee-based, 10-year minimum volume commitment for gathering and transmission services also provides RangeResourceswith the opportunity to expand capacity to 300 BBtu (Billion British thermal units) per day and above.
EQT Midstream Partners will invest $55 million in transmission and gathering infrastructure related to the agreement. This will add roughly 100 BBtu per day to the partnership's transmission capacity.
In the fourth quarter earnings release, the partnership announced a quarterly cash distribution of 46 cents per unit. The cash distribution for the quarter increased 31% year over year and 7% over the preceding quarter.
For 2014, EQT Midstream expects to invest $135-$140 million under its capital spending plan. This includes $105-$110 million related to expansion of gathering and transmission projects. The latter is expected to add 750 BBtu per day to the partnership's transmission capacity bringing the total capacity to 3.0 trillion Btu per day.
The positive fundamentals of the partnership have been duly reflected in positive estimate revisions. The Zacks Consensus Estimate for 2014 has risen from $2.72 to $2.76 in the past 60 days, reflecting an uplift of 1.5%.
EQT Midstream currently has a Zacks Rank #3 (Hold). Better-ranked stocks in this space include NuStar GP Holdings, LLC ( NSH ) and Clayton Williams Energy, Inc. ( CWEI ). Both these stocks carry a Zacks Rank #2 (Buy).WILLIAMS(C)ENGY (CWEI): Free Stock Analysis ReportEQT MIDSTRM PTR (EQM): Free Stock Analysis ReportNUSTAR GP HLDGS (NSH): Free Stock Analysis ReportRANGE RESOURCES (RRC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research