The appeal of Rose Rock Midstream LP can be found in its name, an analyst says.
"I like midstream companies in the energy industry because they are the ones that have the pipelines and storage facilities, and are under contract to move products from point to point," said Bruce DeShazo, a financial adviser and vice president at American Heritage Investments.
"I think having this niche in the business makes midstream companies' earnings not fluctuate as much. And, in Rose Rock's case, their earnings have been really good."
Rose Rock reported second quarter adjusted EBITDA of $15.4 million, up 77 percent from the same period last year.
The company also was highlighted recently by Arie Goren, a contributor to online investment newsletter Seeking Alpha. Near the end of August, Rose Rock was one of three stocks Goren found to have both strong earnings growth prospects and an attractive dividend.
Rose Rock was trading at the time for about $33 a share. It had a forward annual dividend yield of 5.3 percent and a 79 percent payout ratio, Goren noted.
Rose Rock was formed by Tulsa-based SemGroup in 2011 to gather, transport, store, distribute and market crude oil in Oklahoma, Colorado, Kansas, Minnesota, Montana, North Dakota and Texas. It owns and operates 28 crude oil storage tanks in Cushing with a total capacity of 7 million barrels. It also has a crude oil pipeline system and a truck unloading facility.
Rose Rock Midstream LP
Address: 6120 S. Yale Ave. Suite 700, Tulsa, OK, 74136-4216
Telephone: 918-524-7700
Web: www.rrmidstream.com
CEO: Norman J. Szydlowski
Symbol (Exchange): RRMS (NYSE)
Operation: Owns, operates, develops and acquires a diverse portfolio of midstream energy assets.
John Stancavage 918-581-8314
john.stancavage@tulsaworld.com
Original Print Headline: Solid earnings promise growth
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SemGroup Corp. has been navigating in unchartered territory since the company filed for bankruptcy in 2008, but the energy products transportation and storage firm will soon be without the leader who guided it through choppy waters.
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