The Ukraine war and challenges with gas supplies has wreaked havoc in Europe, cautions Mark Skousen, editor of Forecasts & Strategies — and a participant in The MoneyShow Orlando, October 30 to November 1. Register here.
Here’s a way to profit from the growing demand for liquid natural gas. Based in Houston, Texas, Cheniere Energy (LNG) is the largest liquefied natural gas exporter in the United States.
Cheniere has benefited from sharply higher natural gas prices, which have gone from $5.66 to $9.11 per million BTUs in the past year. It also recently completed a new production line ahead of schedule and raised output at its existing facilities in Louisiana and Texas.
As a result, Cheniere has seen total revenues triple to $15.5 billion. It has generated $5.2 billion in cash from its operations in the first six months of this year, compared to $1.4 billion a year earlier.
This also allows Cheniere to pay down its heavy debt position by $4 billion. The company expects to achieve an investment-grade credit rating next year.
Guidance is very positive — there is increasing demand from European customers looking to replace Russian gas. It recently signed long-term contracts to deliver some 140 million tons of liquid natural gas through 2050. It is also expanding its Corpus Christi Stage 3 project.
Financially, starting in November of last year, Cheniere Energy started to pay a modest dividend of 33 cents per share. It has also repurchased 4.1 million shares worth $540 million in the most recent quarter. To take advantage of the natural gas shortage in Europe, add Cheniere Energy to your portfolio if you haven’t already.
