DT Midstream, Inc. (DTM)
NYSE - Nasdaq Real Time Price. Currency in USD
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We see six reasons to own
DTM. First, it boasts a high quality, well-covered dividend with an estimated 6% yield in ’22.
Second, its balance sheet is top tier with a clear path to investment grade and <3.0x
leverage by 2025. Third, DTM generates on average a 10% FCF yield through 2025 and
funds all its growth without the need for external capital. Fourth, DTM’s exposure to growing
gas basins drives a first-quartile EBITDA CAGR of 5%. Fifth, DTM’s contract structure limits
volatility with 70% of revenues supported by minimum volume commitments (MVC) with
almost no direct commodity exposure. Finally, DTM is a C-Corp with ambitious energy
transition goals – an ESG attribute we would expect to widen the investor pool.
The DT Midstream Board of Directors declared a $0.60 per share dividend on its common stock payable Oct. 15, 2021 to shareholders of record at the close of business Sept. 20, 2021
In the Haynesville shale formation in Texas, Louisiana and Arkansas, Kinder executives said there may be need for additional takeaway capacity in three to five years as drilling activity in the basin increases due to its proximity to Gulf Coast liquefied natural gas export plants.
Haynesville is the nation's third biggest gas-producing shale field.