9.8% yield (tax free) on OMP

Discussion in 'Trading' started by Apux, Jul 2, 2021.

  1. Apux

    Apux

    OMP - Oasis Midstream Partners

    Recent high $35.70
    Currently $23.03


    This is interesting to me because they have a much lower LT debt ratio than the few other MLP's with a higher yield. They have also increased their payout 7 times in 3 years. (Reminder these are also classified as tax free returns of capital at the federal level.)

    Their parent, OAS, sold 11% of their OMP holdings to raise some cash as part of the parents move to a pure-play Williston producer. This is what called the price decline. (It is worth noting they still own 67% of the company.)

    This opens the door for more Midstream cash flow coming from the Williston region. As OAS acquired several hundred thousand hectare of oil/gas rich land. OAS is a highly profitable oil and nat gas producer so I expect that there is little to no risk to OMP's operation.

    For this reason and the push for new production out of Williston there will be more distribution increases coming for OMP and the price of the stock will retest recent highs of 35.70.