Looking for an attractive, well-covered yield in the energy sector? Energy leads all sectors in 2021, up more than 46%, as prices continue to rise, with crude and natural gas hitting seven-year highs. This stock yields 7.7%, with a conservative 19.78% Free Cash Flow Payout Ratio. It has several new projects online in 2021, with capex quickly winding down, which will pump up its Free Cash Flow. It has outperformed the market, but still looks undervalued vs. midstream averages.
Restored energy demand supports producers and midstream companies, such as Rattler Midstream LP (RTLR), and its parent/GP, Diamondback Energy (FANG). Rattler Midstream LP IPO'd in May 2019. It owns, operates, develops, and acquires midstream infrastructure assets in the Midland and Delaware Basins of the Permian Basin in West Texas. The company provides crude oil, natural gas, and water-related midstream services to Diamondback Energy, Inc. It owns and operates 528 miles of crude oil gathering pipelines, natural gas gathering pipelines, and an integrated water system on acreage that overlays Diamondback's 6 core Midland and Delaware Basin development areas.
Source: Seeking Alpha
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