ONEOK, Inc. (OKE)| Daily Alert June 3
ONEOK, Inc. is a large-cap energy midstream company that will pay an attractive yield and growing dividends for years. Even though energy stocks have posted great gains so far in 2021, OKE still yields just over 7%. Also, the share price was $20 higher before the pandemic triggered a crash of the energy sector.
ONEOK should be part of your overall income portfolio investment plan. If you don’t own any yet, pick up some shares. If you are underweight this stock, add a few shares.
Before the pandemic, ONEOK increased the dividend every quarter, with the payout growing by about 10% per year. I hope the company soon returns to a dividend growth plan. That move would help propel the stock price even higher. The next dividend announcement comes in July.
Recommendation: Buy or Add shares of OKE up to $57.50, which locks in a minimum 6.5% yield.
Tim Plaehn, The Dividend Hunter, yn345.isrefer.com/go/cabmdpc/cab/, May 25, 2021
*Lynas Rare Earths Limited (LYSCF)
Lynas is the one of the only producers of scale of separated rare earths outside of China and the second largest in the world.
Governments all over the world are moving toward electric vehicles, and renewables. Many want far more electric vehicles on the road. In fact, here in the U.S., California Gov. Newsom signed an executive order that will ban the sale of gas-powered passenger cars in the state starting in 2035. We’re even moving towards a greener future with solar and wind.
However, for that to happen, many must also have reliable access to rare earth metals. Unfortunately, many countries are running into a severe problem. Nearly all rare earth comes from China, which has proven to be unstable. Worse, China has announced tougher regulations over the rare earth industry, from mining to exports.
As the world races to secure rare earth outside of China, Lynas could benefit.
Ian Cooper, The Cheap Investor, firstname.lastname@example.org, June 2021
*MPLX LP (MPLX)
MPLX LP is a midstream partnership that’s 62.88% owned by Marathon Petroleum (MPC) that has rallied almost to our highest recommended entry point of 30 this month. That follows the release of very strong Q1 results, including $1.1 billion in net cash generated by operating activities.
The contract-based Logistics and Storage business saw flat income from operations and a 2.8% lift in EBITDA. Gathering and Processing EBITDA increased 8.1%. That was despite a -12% decrease in gathered volumes and -5% lower processing volumes, partly offset by 1% higher fractionated volumes. In the key Marcellus region of Appalachia, the company’s gathered volumes declined by -9% but processed and fractionated volumes rose by 3% and 7%, respectively. That’s promising going forward, even as the company remains on track to bring three major pipeline projects into service by the end of 2021 linking the Permian Basin of Texas with the Gulf Coast.
Cash flow from these new assets should greatly offset the continuing impact on system volumes of weakness in other regions such as the Bakken and the Rockies, as producers focus on generating free cash flow over output. At the end of the day, MPLX’s fate is directly tied to Marathon’s, including the latter’s eventual decision on whether to continue to own the unit or possibly convert it to a C-Corp from MLP structure. But whatever happens, the parent’s recent decision to swap incentive distribution rights for ordinary shares should closely align its interests with those of other unitholders as far as taxation goes. Meanwhile, the partnership continues to prove its resilience by renewing contracts. Buy up to 30.
Elliott H. Gue and Roger S. Conrad, Energy Income Advisor, www.energyandincomeadvisor.com, May 25, 2021
*Wheaton Precious Metals Corp. (WPM)
Wheaton Precious Metals reported record quarterly revenues for the first quarter of the year. Although its “gold equivalent” sales fell 1.9% from the previous quarter (though up 5.6% from a year ago), its attributable production was nearly 8% more than sales, due to delays in cobalt deliveries from the Salobo mine, the first quarter of cobalt deliveries.
Although the gold price fell in the quarter, the realized price of silver and palladium both increased, more than offsetting the gold price decline. Similarly, gold sales fell by 13% while silver sales jumped 45%. Overall, Wheaton’s revenues increased, by 13% relative to the prior quarter and by 27% compared with a year ago…
Wheaton now is essentially debt free, with over $2 billion in available liquidity. Santo Domingo, a long-life copper mine in Chile, is expected to commence production in 2024, generating about 35,000 ounces per year for the first five years. This is the third small stream acquired by Wheaton over the past six months, for a total of $550 million.
Compared with other major royalty companies, it is undervalued. If you are underweighted in the sector, Wheaton would be the top buy now.
Adrian Day, Adrian Day’s Global Analyst, adriandayglobalanalyst.com, 410-224-8885, May 9, 2021
*Exelon Corporation (EXC)
Outside of fallout from Winter Storm Uri and Texas’ market dysfunction, there wasn’t much evidence of operating cost pressures in Q1 for most coverage universe companies. In fact, most are still selling bonds with coupon rates near multi-generation lows, including in the fast-growing green debt market. Some utilities have actually received an earnings benefit from rising interest rates and inflation. Illinois, for example, automatically resets companies’ allowed returns on equity based on the 30-year Treasury bond rate, giving a boost to results for regulated utilities Exelon Corp (EXC). Exelon is still a buy up to 48.
Roger Conrad, Conrad’s Utility Investor, www.ConradsUtilityInvestor.com, 888-960-2759, May 31, 2021