EQT Midstream Up 50% This Year, Dividend Yields 3.5%

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EQT Midstream Partners ( EQM ), which stores and transports natural gas, is benefiting from the fracking boom in the Appalachian Basin.

The stock went public in June 2012 after being spun off by EQT Corp. ( EQT ), an explorer and producer of natural gas and oil.

EQT Midstream has more than doubled from its IPO price of 21 and is up about 50% this year, easily beating the S&P 500.

Meanwhile, EQT Midstream has raised its dividend twice since going public, to 40 cents a share currently from the initial payout of 35 cents in November 2012. On an annual basis, the dividend is $1.60 a share for a yield of 3.5%. That's better than the average S&P 500 yield of 2.54%.

As a master limited partnership, EQT Midstream raises money from investors to finance its activities. MLPs don't pay taxes but must make regular cash payments to their investors.

According to an Aug. 6 New America story , EQT Midstream operates pipelines carrying natural gas out of the productive Marcellus Shale region in Pennsylvania and West Virginia.

Profit growth has been robust over the past eight quarters, ranging from 25% to 136%. Profit for the current quarter is seen rising 53% from a year ago to 52 cents a share.

Sales growth has accelerated for six straight quarters, going from a 16% increase in the first quarter of 2012 to subsequent increases of 18%, 26%, 38%, 43% and 51%.

In July, EQT Midstream acquired Sunrise Pipeline from EQT. EQT Midstream Senior Vice President Randall Crawford said the deal will likely be "significantly accretive in years two and three."

The stock corrected 18% after hitting a high of 51.72 on May 28. But it's retaken its 10-week line as it tries to shape the right side of a cup-type base.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas

Referenced Stocks: EQM , EQT

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