4 Oil & Gas Pipeline Stocks To Buy On The Dip

Fossil fuel companies have experienced an unprecedented rise in their profits, raking in billions of dollars in the first nine months of this year. In the third quarter, gas prices in the country have increased by 50% year-over-year to an average of $3.40 per gallon. After posting solid gains earlier in the week, oil prices steadied at around $75 per barrel on December 8.

The United States Energy Information Administration (EIA) estimated that four billion cubic feet per day (Bcf/d) of new natural gas pipeline capacity has entered into the service over the third quarter of this year. Moreover, the oil and gas pipeline market worldwide is expected to increase at a CAGR of more than 6% from 2021 to 2026.

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Given this favorable backdrop, it might be profitable to scoop up these fundamentally strong oil and gas pipeline stocks Enterprise Products Partners L.P. (EPD), MPLX LP (MPLX), Oasis Midstream Partners LP (OMP), and Martin Midstream Partners L.P. (MMLP), and take advantage of their recent dips.

Enterprise Products Partners L.P. (EPD)

EPD is a midstream energy services provider of crude oil, natural gas, natural gas liquids (NGLs), petrochemicals, and refined products. The company operates through the four broad segments of NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services; and Petrochemicals & Refined Products Services.

On October 12, EPD declared a quarterly distribution of $0.45 per unit, amounting to $1.80 per unit on an annualized basis, which was payable to limited partners holding EPD common units, on November 12, 2021. The distribution reflects upon the strength in the company’s cash position.

In September, Chevron U.S.A. Inc., a part of the Chevron Corporation (CVX) and an EPD subsidiary, unveiled a framework to study and evaluate carbon dioxide capture, utilization, and storage (CCUS) from their respective business units. The joint study is expected to manage the companies’ carbon footprint and support the transition to a lower-carbon economy.

For the fiscal third quarter ended September 30, EPD’s revenues increased 56.5% year-over-year to $10.83 billion. Operating income rose 9.4% from the prior-year quarter to $1.51 billion. Net income and earnings per common unit came in at $1.18 billion and $0.52, respectively, up 9% and 8.3% from the same period last year.

The consensus EPS estimate of $0.54 for the current quarter (ending December 2021) indicates a 260% year-over-year increase. Likewise, the consensus revenue estimate for the ongoing quarter of $10.05 billion reflects an improvement of 42.7% from the prior-year quarter.

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