Antero Midstream (AM) Update - April 5

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Antero Midstream (AM) Update - April 5

Post by dan_s »

From Matthew DiLallo, The Motley Fool

Last month, Antero Midstream (NYSE: AM) completed its simplification transaction. The deal saw two midstream entities created by natural gas producer Antero Resources (NYSE: AR) combine into one single company that will reduce not only complexity but also costs.

The combined company currently expects to pay between $1.23 to $1.25 per share in dividends this year, which implies an attractive yield of 8.8% at the current price. That high-yielding payout likely has income-seeking investors wondering if they should buy the new Antero Midstream.

Read more: https://finance.yahoo.com/news/antero-m ... 00046.html

Matt's article lays out a lot of great reasons to own AM and then his conclusion is that it is not a BUY. Matt does explain that AM's growth is tied to Antero Resource's grow. Reducing that risk significantly is that AR has 100% of their 2019 natural gas production hedged at a very good price, so their revenues are about as locked in as possible.

If you are not familiar with AR & AM, I highly recommend that you (a) read our recent profile on AR (one of our Sweet 16 companies) and then go to the AM website and spend 20 minutes going through their recent presentation slides.
Dan Steffens
Energy Prospectus Group
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