SREA - FEI: A Solid Midstream Fund Coming Off Of A Bad Year

• Midstream companies were devastated by the events of 2020, although their cash flows held up reasonably well.
• The inherent stability is due to their business model that is based around long-term fee-based contracts that are dependent on volumes and not resource prices.
• The long-term fundamentals of these companies are solid due to growth in emerging markets and efforts to fight climate change.
• The fund appears to have been distributing too much in the past, but hopefully, the lower distribution and the industry rebound can fix that.
• The price is very attractive at the present level, and we still get an 8.90% yield.

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