- 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.
For further details see:
DCP Midstream: Higher Distributions In 2022, But Still Not Buying This 6%+ Yield