Despite an uptick late in the year, midstream oil and gas stocks endured a rough 2019 on Wall Street. The sector outperformed the E&P and oilfield service segments but was subdued by a general sense of investor disappointment with energy.
“I think that had a lot to do with the midstream sector spending too much money and frustration with that and people wanting them to dial things back,” said Pearce W. Hammond, managing director for midstream and infrastructure equity research at Simmons Energy in Houston.
This year should be better for the sector, Hammond said, because many in the midstream have listened and responded. Four companies in particular, selected by Hammond and Kyle May, equity research analyst for Capital One Securities, are primed for strong uplifts in part because of their approach to generating free cash flow.