If you missed investing in any great oil and gas companies when oil prices went down to the negatives back in mid March of 2020, then you still have a chance to invest in them today. One of those companies is Crestwood Equity Partners LP (NYSE: CEQP). It is an energy midstream sector company that includes gathering and processing of natural gas, crude oil and produced water. Also, storage and transportation, marketing, supply and logistics are in their business portfolio. You can learn more about the company by visiting their website https://www.crestwoodlp.com/.
It is a well run company speaking from my personal experience. I had worked on many oil and gas projects for many different companies in different sizes including Crestwood. The founder, Robert G. Philips, is also the CEO and Chairman and the President of the company, which started in 2010. It is absolutely a plus to invest in a company that has a great CEO. During the worst time for the oil market in March 2020, their stock price dropped to under $4 from $27 a share in just a month due to the pressure of extremely low oil and natural gas prices. Many people were assuming that Crestwood would cut or eliminate their dividend while many other O&G companies were facing bankruptcy. He and the rest of the board of directors decided not only to continue with the dividend payout but to keep the dividend rate in place with the same $2.5 per share annualized distribution ($0.625 per quarter). Now, imagine if you bought their share at $5 around that March time then you would gain 50% in a year just on the dividend alone.
As of today, 11/19/2021, the stock price is around $27.30 and the dividend rate is still around 9.0%, which is a great return when compared to any CD or interest saving account you would get from your banks. Of course there is always the risk in any investment, but it is easier to sleep at night when you know that you are investing in a great company with a great CEO who would not back stab you as a shareholder (that will be a different topic/post about worst CEOs). Also, all the insiders own around 15% of the company, and most are held by Institutions and mutual Funds. Recently, Crestwood acquired Oasis Midstream for $1.8B which brings the enterprise value to approximately $7B when the market cap is only $1.75B, thus there is still room for the stock to grow. Furthermore, Capital One just upgrades the stock to Overweight with the price target of $32, and Raymond James raises the price target to $34 with Outperform rating.
Again the purpose of our blog is to bring attention to our readers some of the stocks that we think are worthy to invest in or at least worthy to learn about the company. Therefore, before you invest in any stock, please do your research and access your personal risk level. Ask yourself a question: What would you do when the stock you just bought dropped 10%, 25%, 50% or even 75%?