NGL Energy Partners: Fantastic Business Continuing To Scale Very Well
NGL Energy Partners is experiencing strong growth in its Water Solutions segment, characterized by high EBITDA margins and resilient cash flows supported by long-term contracts. The company's earnings are insulated from oil price volatility, enhancing its financial stability. Strategic asset sales and preferred buybacks are aiding debt reduction and capital efficiency. Despite these strengths, NGL trades at a valuation discount relative to its operational performance.
- ▪NGL Energy Partners' Water Solutions segment achieves sector-leading EBITDA margins of 74%.
- ▪Minimum volume commitments and long-term contracts provide stable, predictable cash flows.
- ▪The company is reducing debt through asset sales and aggressive preferred share buybacks.
- ▪NGL's current valuation does not fully reflect the quality and scalability of its core business.
- ▪Author Andres Veurink holds a long position in NGL and discloses no compensation for the article.
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