We recently published a list of the 15 Energy Infrastructure Stocks That Are Skyrocketing. In this article, we are going to take a look at where Dynagas LNG Partners LP (NYSE:DLNG) stands against other energy infrastructure stocks that are skyrocketing.
In January 2024, the Biden administration paused federal authorizations for several pending LNG export projects, citing concerns about environmental impacts and domestic energy security. The US Department of Energy later released an assessment indicating that increased LNG exports could add 1.5 gigatons of greenhouse gas emissions annually by 2050, equivalent to a quarter of the current emissions of the US. However, President-elect Donald Trump is set to reverse the Biden administration’s pause on liquefied natural gas (LNG) export approvals, marking a significant shift in US energy policy.
On January 1, Ukraine officially halted the transit of Russian natural gas to several European nations, marking the end of a five-year agreement and closing a chapter in Russia’s decades-long dominance over Europe’s energy markets. The termination of this deal comes amidst the ongoing war between Ukraine and Russia, with neither side willing to negotiate an extension. Europe is expected to rely heavily on liquefied natural gas (LNG) imports. Christoph Halser of Rystad Energy estimates that the EU will need to source approximately 7.2 billion cubic meters of gas from the global LNG market.
READ ALSO: 10 Best Low Priced Stocks to Invest in Now and 11 Best Renewable Energy Stocks To Buy Now.
As Europe pivots away from Russian gas, the United States emerges as a key player in filling the supply gap. US LNG exports to Europe have already been rising in recent years, and this shift presents an even greater opportunity for American energy producers. With robust infrastructure and increased LNG export capacity, the U.S. is well-positioned to strengthen its role as a reliable supplier to Europe, enhancing energy security across the continent while bolstering its own energy industry.
The growth of US energy exports hinges on significant investments in infrastructure. According to a report by ICF, prepared for the American Petroleum Institute (API), the development of US oil and gas infrastructure is expected to remain robust through 2035. The report highlights that the primary drivers for continued infrastructure development remain strong. Shale and tight oil resource extraction are projected to continue at a rapid pace, supported by advancements in extraction technologies and favorable market responses to competitive commodity prices. Total capital expenditures (CAPEX) for oil and gas infrastructure are projected to range between $1.06 trillion and $1.34 trillion from 2017 to 2035. This equates to an average annual investment of $56 billion to $71 billion, spanning various infrastructure components, including surface and lease equipment, gathering and processing facilities, pipelines for oil, gas, and natural gas liquids (NGLs), storage facilities, refineries, and export terminals.
As global energy dynamics shift, the United States stands poised to play a pivotal role in ensuring energy security for Europe while driving growth in its own energy sector.
A view of a bustling headquarter building, with large modern glass windows overlooking the city skyline.
Our Methodology
To compile our list of the 15 energy infrastructure stocks that are skyrocketing, we used Finviz and Yahoo stock screeners to rank the top 15 energy infrastructure stocks that achieved the highest gains over the past six months. We also included their hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of 6-month performance, as of January 2.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Dynagas LNG Partners LP (NYSE:DLNG)
Returns in Past 6 Months: 42.12%
Number of Hedge Fund Investors: N/A
Dynagas LNG Partners LP (NYSE:DLNG) is a Greece-based company specializing in the ownership and operation of LNG carriers. The company operates a fleet of six LNG vessels that provide maritime transportation services under long-term charters. Dynagas LNG Partners LP (NYSE:DLNG) serves prominent gas companies such as Equinor, SEFE, and Yamal Trade.
The stock price of Dynagas LNG Partners LP (NYSE:DLNG) has increased significantly, driven by several key factors. One of the primary reasons for this increase is the company’s successful refinancing of its debt. Dynagas LNG Partners LP (NYSE:DLNG) was originally scheduled to pay off a significant portion of its debt in September. However, in June, the company fully repaid its previous credit facility of $408.6 million, ahead of its maturity, and completed a new lease financing agreement with China Development Bank Financial Leasing for four of its LNG carriers. By doing so the company has pushed out its debt maturity to June 2029 for three of its LNG carriers and June 2034 for one remaining vessel, with two of its LNG carriers now operating debt-free. This extension provides Dynagas LNG Partners LP (NYSE:DLNG) with greater financial flexibility and focus on growth and investment opportunities.
As of September 10, Dynagas LNG Partners LP’s (NYSE:DLNG) fleet has a contracted backlog of approximately $1.04 billion, which translates to an average of about $173 million per vessel. This backlog provides a stable and predictable revenue stream, which has helped to increase investor confidence in the company. Additionally, the company’s average remaining charter period of approximately 6.4 years provides a high level of visibility into its future cash flows, which has also contributed to the increase in stock price.
Overall, DLNG ranks 11th on our list of energy infrastructure stocks that are skyrocketing. While we acknowledge the potential of DLNG to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DLNG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.