DCP - DCP Midstream: Higher Distributions In 2022 But Still Not Buying This 6%+ Yield

• The management of DCP Midstream appears to have flagged potentially higher distributions in 2022, although issues remain.
• After seeing their operating cash flow weighed down during the first half of 2021, it has finally started to recover during the third quarter.
• When looking at their key priorities for 2022, management has flagged higher distributions once reaching their leverage target.
• Whilst they have ample free cash flow to fund higher distribution payments, sadly the appeal is diminished by their very high leverage and weak liquidity.
• Since their unit price remains near my previously estimated bullish scenario intrinsic value, I believe that maintaining my bearish rating is appropriate.

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