Four Natural Gas Income Investments to Weigh as Ukraine Tries to Keep Russia’s Missiles Away
By: Paul Dykewicz,
Four natural gas income investments to weigh feature consistent dividend payers as Ukraine tries to keep Russia’s missiles away, especially from residential areas and power plants.
The four natural gas income investments to weigh offer an opportunity for growth and dividend payments amid Russia’s continuing attacks of neighboring Ukraine that even led to the death of two Polish civilians on farms when Russian-made missiles hit their village of Przewodow, roughly four miles, or 6.4 kilometers west of the Ukrainian border on Tuesday afternoon, Nov. 15. The Russian missiles reportedly either came from Ukraine while attempting to fend off Russia’s attacks or Russian misfires that unintentionally reached Poland.
Either way, the need for alternative energy sources, such as natural gas, is growing as the existing power supply in Ukraine remains under assault. Regardless of exactly how missiles killed the two civilians in the NATO nation of Poland, they lost their lives because of Russia’s so-called “special military operation” that began on Feb. 24 and has led to the deaths of more than 100,000 people on each side of Russia’s war against Ukraine, according to Mark Milley, Chairman of the U.S. Joint Chiefs of Staff. He also estimated Russia’s invasion has forced anywhere from 15 million to 30 million Ukrainian civilians to become refugees.
The four national gas income stocks to weigh could be part of a solution to provide power to people who desperately need it as winter approaches and Russia’s persistent attacks plunge Ukrainians into cold and dark conditions far removed from conventional military activity. Roughly 10 million people lost power on Tuesday, Nov. 15, due to Russia’s “terrorist” attacks against Ukraine, its President Volodymyr Zelensky announced on his Twitter account.
Zelensky reported that power engineers and repairmen restored electricity supply to eight million consumers in the hours after the attacks. Repairs continued the rest of the night and subsequent days as Russia persisted in its assault against Ukrainian’s power infrastructure.
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EPD Is One of Four Natural Gas Income Investments to Weigh as Ukraine Seeks to Keep Russia’s Missiles Away
The four natural gas income investments to weigh offer opportunities to tap into rising demand for alternatives to energy sources that previously had been provided by Russia before it began the Feb. 24 invasion, followed by cutting off supply to European countries such as Poland that objected to the attacks against the sovereign nation of Ukraine. The United States is among many countries that have chosen to stop importing Russia’s oil and natural gas, while Germany and other nations that lack immediate access to substitute sources of energy are seeking to scale back those imports that are funding the war against Ukraine initiated by Russia’s President Vladimir Putin.
Houston-based pipeline and energy storage company Enterprise Products Partners (NYSE: EPD) is a recommended position of Mark Skousen, PhD, a descendant of Benjamin Franklin, who leads the Forecasts & Strategies newsletter. I first learned about the company from him and subsequently bought shares myself that have produced returns so far this year of 21.95%. In contrast, the S&P 500 has slid 16.97%.
Mark Skousen, a scion of Ben Franklin, meets with Paul Dykewicz.
Enterprise Products Partners is one of the largest publicly traded partnerships and a key North American provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products and petrochemicals. The company’s services include natural gas gathering, treating, processing, transportation and storage.
In addition, Enterprise Products Partners provides NGL transportation, fractionation, storage and import and export terminals. It further offers crude oil gathering, transportation, storage and terminals, along with petrochemical and refined products transportation, storage and terminals, as well as a marine transportation business.
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Cheniere Energy Is Second of Four Natural Gas Income Investments to Weigh
Houston-based Cheniere Energy Inc. (AMEX: LNG) became the first U.S. company to export liquefied natural gas (LNG) in February 2016 and it has found a niche in serving overseas markets. Cheniere Energy now is the largest liquefied natural gas exporter in the United States.
Business is booming, said Skousen, who recommends it in his Forecasts & Strategies newsletter. He also recommended it earlier this year in his TNT Trader advisory service before informing his subscribers to sell it for a profit.
Cheniere’s revenues surged 165% in the past year to $8.1 billion. Its earnings also soared, while management’s guidance is strongly positive as demand grows from European customers seeking to replace Russian gas. Cheniere Energy recently signed long-term contracts to deliver about 140 million tons of liquid natural gas through 2050.
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The U.K. government confirmed it is in talks for an LNG purchase agreement with Cheniere Energy, among others, Skousen informed his subscribers. Currently, 70% of Cheniere’s cargo of LNG is landing in Europe, he added.
Connell Praises Cheniere Energy as One of Four Natural Gas Income Investments to Weigh
The purchase of shares in Cheniere Energy may be a timely idea due to Russia’s Nov. 15 air strikes in Ukraine to mark the biggest attack in a month, said Michelle Connell, CFA, president and owner of Portia Capital Management, of Dallas, Texas. Cheniere Energy currently has a #1 rank from Zacks, with a consensus estimate for 2022 earnings and sales of year-over-year growth of 212.3% and 103.2%, respectively.
Connell told me her analysis is that Cheniere Energy conservatively has 12-18-month upside of 20%. Some sell-side analysts forecast price targets more than 30% above current levels. The stock already has jumped 64.53% so far this year through Nov. 18.
Michelle Connell is the CEO of Portia Capital Management, of Dallas, Texas.
Exxon Mobil Joins Four Natural Gas Income Investments to Weigh
Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM) offers exposure to the LNG market. Indeed, the dividend-paying company ranks as the world’s second-largest supplier of natural gas, pays a 3.3% dividend yield and already has jumped more than 91.08% so far in 2022.
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Germany is among the European countries that are seeking to transition completely from importing oil and LNG from Russia but need to turn to alternative producers in countries such as the United States. Europe is viewing LNG as its main energy substitute, with a plan to reduce Russian energy imports by two-thirds this year.
However, prices in remain high. The producer price index, which generally reflects supply conditions in the economy, climbed 8% on a 12-month basis in October, a slight dip from September’s revised 8.4% rise.
Jim Woods, head of the Intelligence Report investment newsletter and the High Velocity Options trading service, recommends Exxon Mobil stock and call options, respectively. Both trades are profitable, and he is continuing to recommend them to pursue heightened returns.
Paul Dykewicz meets with Jim Woods in Washington, D.C.
Pension Chairman Recommends ETF as One of Four Natural Gas Income Investments to Weigh
Cohen & Steers MLP & Energy Opportunity Fund (MLOAX) is a fund that is favored by Bob Carlson, a pension chairman and head of the Retirement Watch investment newsletter. Natural gas should remain a good investment, if Europe keeps looking for ways to reduce its energy dependence on Russia, he added.
In addition, the natural gas drillers in the United States are focused on increasing cash flow and earnings, Carlson said. They are not inclined to maximize drilling expenses in the short run to increase output, he added.
Bob Carlson, who leads Retirement Watch, meets with Paul Dykewicz.
Good investment opportunities can be found with companies that provide the pipelines, storage facilities and other infrastructure needed to supply the world with natural gas and other energy sources, Carlson told me. One appeal of these investments is that their revenues are independent of the prices of the commodities, Carlson counseled.
“The firms charge fees for their services, and the fees often are adjusted for inflation,” Carlson said. “Their revenues and earnings depend on the volume of commodities passing through their facilities, not the price of the commodity.”
BofA Global Forecasts Favorable Conditions for Four Natural Gas Income Investments to Weigh
“Given the greater weight of gasoline in the generic U.S. refining yield, we continue to believe U.S. refiners are poised for extended period of elevated refining margins, well above mid cycle in 2023, but with mid cycle itself being reset on multiple levels, starting with the continued arbitrage between European and U.S. natural gas,” BofA Global wrote.
Demand growth is set to slow in 2023, especially as the economic outlook continues to dim, BofA wrote. The investment firm’s U.S. economists anticipate a recession in 2023, with gross domestic product (GDP) shrinking 0.6% year over year.
Although natural gas demand is volatile and highly dependent on weather, industrial gas demand has contracted in each recession year since 2000. As demand from these sectors shrinks year over year, BofA predicts LNG export growth of 1.4 Bcf/d year over year due to the Freeport LNG restart.
“In aggregate, U.S. natural gas demand should rise 1.5 Bcf/d in 2023, just one-third the pace of growth in 2022,” BofA estimated.
BofA maintains a $4.50/MMBtu forecast for 2023, or $0.35/MMBtu below the curve. Henry Hub could trade sub-$4 if economic headwinds prove more wicked than expected or LNG loadings and Mexico exports disappoint, the investment firm added.
Bivalent COVID-19 Vaccine Gives Improved Protection Against New Variant
A new bivalent COVID-19 booster in the United States offers superior protection against the omicron BA.5 variant, now the predominant strain of the virus. I received the new booster on Oct. 16 after it became available at pharmacies not far from my house.
However, 200-plus million Americans who are eligible have yet to seize the opportunity. New cases and deaths can hurt demand for natural gas, so a bivalent booster that becomes widely used could aid both public health and the economy.
Cases in the country totaled 98,301,472 and deaths reached 1,077,020, as of Nov. 18. America has the dreaded distinction of amassing the most COVID-19 cases and deaths of any nation. Worldwide COVID-19 deaths totaled 6,619,779, as of Nov. 18, according to Johns Hopkins University. Global COVID-19 cases reached 637,577,338.
Roughly 80.6% of the U.S. population, or 267,476,279, have received at least one dose of a COVID-19 vaccine, as of Nov. 16, the CDC reported. People who obtained the primary COVID-19 doses totaled 228,154,832 of the U.S. population, or 68.7%, according to the CDC. The United States also has given a bivalent COVID-19 booster to 33,831,057 people who are age 18 and up, accounting for 13.1% of the U.S. population in that age range.
Despite Russia’s leaders calling their country’s attacks against Ukraine that began on Feb. 24 a “special military operation,” firing into Ukraine also killed two Polish civilians to further inflame an already volatile situation. Investors seeking ways to avoid losing money in the markets amid such uncertainty and escalation of violence should consider the four natural gas income investments to weigh.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Special Holiday Offer: Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great holiday gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for special pricing on multiple-book purchases.