TYG - MLP/Midstream Valuations Part 1: Focusing On Free Cash Flow

Given the high relative yields of the sector, investors have long turned to energy infrastructure companies, particularly MLPs, as a source of income in their portfolios. Valuations for the sector have historically been viewed through the lens of that dividend yield. However, as the industry has shifted away from prioritizing dividend payouts to a focus on capital discipline, stronger balance sheets and free cash flow generation, these income-oriented valuation methods have become outdated. In the first half of our two-part series on valuations, we discuss why yield spread analysis is less relevant for today’s midstream

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