① North American oil and gas pipeline companies are selling shares at the fastest speed since 2017 and have raised $5.7 billion since 2023; ② These companies are attracting investors with generous dividends and sufficient liquidity.
Financial Services Association, April 11 (Editor Zhou Ziyi) With the huge appeal of generous dividends and sufficient liquidity, North American oil and gas pipeline companies are selling stocks at the fastest speed since 2017, and some analysts say this boom will continue.
According to data compiled by the media, after experiencing a slow start in 2023, the oil and gas pipeline sector has raised 5.7 billion US dollars by issuing new shares and selling old shares, which is the fastest growth rate in six years (since 2017).
Furthermore, since January 1 of this year, oil and gas pipeline stocks have added 910 million US dollars in financing; the total amount of financing over the past 12 months has accounted for almost half of the total amount of 14.5 billion US dollars of financing for the entire oil and gas industry.
Huge dividends
Investors have been eagerly snapping up these shares because these companies are offering huge dividends to shareholders.
Canadian Pipeline Operators$Enbridge Inc 6.375% Fxd Fltg Sub Nts Sr 18 B 15/04/78 (ENBA.US)$Shares of 3.4 billion US dollars were added in September last year, and the dividend yield reached 7.8%, which is coveted; in 2024,$Delek Logistics Partners LP (DKL.US)$It raised $138 million through additional stock issuance, and the dividend yield was 11%.
Referring to oil and gas pipeline companies that raise capital through stock offerings, Daniel Nowlan, Vice Chairman of National Bank Financial and Managing Director of Equity Capital Markets, said, “Currently, any deal would be welcome, and the market will be open to companies of any size. As long as they can make good use of the funds received, even if they use the funds to pay off debts.”
Nowlan also added that the liquidity and high yield of these stocks make their (fundraising) transactions easier.
Furthermore, the sale of shares in existing oil and gas pipeline companies was warmly welcomed. Major US oil and gas exploration and development company$Apache (APA.US)$A subsidiary sold at a high price of US$441 million$Kinetik Holdings (KNTK.US)$Shares, Global Infrastructure Partners sold for $331 million$Hess Midstream (HESM.US)$stocks.
Neal Dingmann, an analyst at Truist Financial, wrote in an earlier report that the wave of mergers and acquisitions is driving the popularity of pipeline stocks and pipeline companies that are not yet listed, which is an “exciting trend.” He expects this trend to continue as “hundreds of private-equity-backed pipeline companies and several listed companies may be targeted for mergers and acquisitions in the next few quarters.”