EnLink Midstream LLC (ENLC) - Q2 Update on August 8

[dan_s]

ENLC is in our High Yield Income Portfolio. It is taxed as a C-Corp, so no K-1.

Below are Stifel's comments on their Q2 results.

EnLink Midstream LLC (ENLC, $7.41, Hold; Target $10.00) by Timothy D. Howard

ENLC: New CEO, Same Strategy; Maintain Hold

EnLink Midstream posted 2Q19 results in line with our estimates. ENLC finished down 12% yesterday relative to the AMZ’s decline of 2% as a result of an abrupt CEO change with a lack of strategic change. In addition, guidance was reduced following slowing growth in Oklahoma and the Permian, and a customer bankruptcy. Capital spending was adjusted upward in 2019, while 2020 spending could decline by 50%. While ENLC’s decline, current valuation and yield may create investor interest, the partnership’s leverage is elevated and the assets are segregated in multiple basins without the ability to capture margin across the value chain which limits our constructive outlook. EnLink could be interesting for risk seeking investors as a 15% yield is compelling with a sub-2% 10-Year U.S. Treasury. With that said, we prefer strong balance sheets in today’s environment and maintain our Hold rating

[dan_s]

EnLink Midstream LLC (stock ticker: ENLC) will be reappointing its current executive chairman, Barry E. Davis, as chief executive officer, effective August 8.

Previously, Davis, who will be retaining his position on the board, served as EnLink’s CEO from its founding in 2014 until 2018. He will be replacing Michael J. Garberding, who is leaving the company to pursue other opportunities.