Antero Midstream Keeps Dividend Intact, Buys Back 3.2M Shares

Antero Midstream Corporation AM recently announced second-quarter capital return moves including stock repurchases and dividend payments. It has also scheduled second-quarter earnings release on Jul 29, after the market closes.

Returning Capital

The company bought back around 3.2 million shares for $8.9 million during the June quarter. At quarter-end, it had $150 million left under the $300-million share buyback plan. The latest move can boost investor confidence in the current scenario, in which the energy sector as a whole is fighting a low demand situation that stemmed from coronavirus-induced lockdowns.

The company kept second-quarter cash dividend payment unchanged at 30.75 cents per share from the first-quarter level amid the current market volatility, while some companies have opted for dividend cuts and halts. The primary reason behind the move is that Antero Midstream generates risk-free stable fee-based revenues under long-term contracts for providing customized and integrated midstream services to leading natural gas producer - Antero Resources Corporation AR.

The dividend is expected to be paid on Aug 12 to Antero Midstream’s shareholders of record as of Jul 30. Notably, the company is about to make 22 consecutive payments to shareholders since its IPO in November 2014.

Q2 Estimates

The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at 20 cents per share, indicating a rise of 33.3% from the year-ago period. Growth in gathering, compression and fresh water delivery volumes is expected to have aided its earnings. However, second-quarter revenues are expected to decline 8.9% year over year to $232.9 million. Notably, the company outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once. It delivered a four-quarter average earnings surprise of 32.6%.

Price Performance

Stocks of the company have popped 63.7% in the past three months compared with 7.2% rise of the industry it belongs to.

Zacks Rank & Stocks to Consider

Antero Midstream currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Enbridge Inc. ENB and Cheniere Energy, Inc. LNG, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Enbridge has witnessed four upward and three downward revisions in the past 60 days for the current quarter. During this time period, the Zacks Consensus Estimate for earnings has jumped 5.3%.

Cheniere Energy’s bottom line for second-quarter 2020 is expected to rise 200% year over year.

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

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