EMES vs. HCLP
Buy Battle
Determining which MLP to buy will come
down to a few key metrics, management’s
guidance for the future, and how...
Yield
Let’s begin with our first metric: Yield.
Yield
3.9%4.6%
Yield
Historically, BOTH of these yields would be
considered AVERAGE or LOW. Given many MLPs
are sporting even lower yield...
MRQ Distribution coverage
An MLPs distribution coverage ratio should always
be greater than 1.0 times distributions paid.
...
MRQ Distribution coverage
1.18x coverage
Q1 DCF $17.4 million
1.1x coverage
Q1 DCF $26.2 million
MRQ Distribution coverage
This factor is a bit of a wash, both MLPs have
adequate coverage.
In theory, because $EMES is a ...
Management guidance
• Distributable cash
flow: N/A
• 2014 Distribution
guidance:
$3.80 to $4.00
• Distributable cash
flow ...
Actual growth story: Emerge
• 1 new mine coming online in 2014, in the
permitting stage for two other new mines expected
o...
Actual growth story: Hi-Crush
• Recent contract with C&J Energy Services, five-
year supply agreement.
• Recent contract w...
Key takeaways
• Metrics at both of these MLPs are in good shape
by MLP standards
• Growth is quite visible at both MLPs, a...
Here are your better
ideas
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Emerge Energy Services vs. Hi-Crush Partners

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Which frac sand manufacturer is best: Emerge Energy Services or Hi-Crush Partners?

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Emerge Energy Services vs. Hi-Crush Partners

  1. 1. EMES vs. HCLP
  2. 2. Buy Battle Determining which MLP to buy will come down to a few key metrics, management’s guidance for the future, and how these MLPs are working to execute their growth plan.
  3. 3. Yield Let’s begin with our first metric: Yield.
  4. 4. Yield 3.9%4.6%
  5. 5. Yield Historically, BOTH of these yields would be considered AVERAGE or LOW. Given many MLPs are sporting even lower yields right now, these two look good comparatively. Winner: EMES Let’s move on to the next metric.
  6. 6. MRQ Distribution coverage An MLPs distribution coverage ratio should always be greater than 1.0 times distributions paid. Credit rating agencies like Standard & Poor’s don’t give “bonus points” for higher coverage, but that could let investors know how much breathing room an MLP could have for distribution growth.
  7. 7. MRQ Distribution coverage 1.18x coverage Q1 DCF $17.4 million 1.1x coverage Q1 DCF $26.2 million
  8. 8. MRQ Distribution coverage This factor is a bit of a wash, both MLPs have adequate coverage. In theory, because $EMES is a variable rate MLP, it should never (ever) miss on coverage. Let’s move on to management’s guidance
  9. 9. Management guidance • Distributable cash flow: N/A • 2014 Distribution guidance: $3.80 to $4.00 • Distributable cash flow ~$100 million to $130 million • Distribution guidance: $2.30 to $2.50
  10. 10. Actual growth story: Emerge • 1 new mine coming online in 2014, in the permitting stage for two other new mines expected online late 2014 to early 2015 • Recently secured 4 new contracts, existing customer contracts continue to grow Quarter-over-Quarter* • Net income +32% • Distributable cash flow +13% • Distribution +13% *EMES does not have YOY data available for all metrics.
  11. 11. Actual growth story: Hi-Crush • Recent contract with C&J Energy Services, five- year supply agreement. • Recent contract with Halliburton, new long- term supply agreement that increases min. volume commitment. Year-over-Year • Net income +32% • Distributable cash flow +20% • Distribution +11%
  12. 12. Key takeaways • Metrics at both of these MLPs are in good shape by MLP standards • Growth is quite visible at both MLPs, and accelerating quickly BUT • Neither of these MLPs offers an impressive yield. If you need better income-generating ideas, grab the free report on the next page
  13. 13. Here are your better ideas

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