High Dividend Stock Yields 14%, Has Strong Customer Base, And Macro Tailwinds

Have you thought about compression lately? Probably not, but it has become a critical factor in the production of natural gas, particularly in "shale" production areas, which are where an increasing percentage of the action is. The EIA has sped up its US natural gas production level forecast by 17 years, from 2040 to just 2023, with shale gas volumes projected to grow over 2 times in this period. This stock yields over 14%, has good coverage, and has upped its distribution 9 times in the past 3 years. It has multi-year relationships with major industry players, and offers a critical service to them. Macro tailwinds should enable it to support its distributions for years to come.

We've written about USA Compression Partners LP, (NYSE:USAC), in some articles published in 2015, but not yet in 2016. We wanted to wait and see how they weathered the Energy storm. Based in Austin, Texas, USAC is one of the biggest compression services firms in the US Oil & Gas industry. It has long-term relationships with a very strong customer base, and has had a miniscule amount of bad debt writeoffs in its 18-year history - less than 0.1% of total billing.

Source: Seeking Alpha

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