Deutsche Bank Picks Top Midstream Energy Companies

Analysts at Deutsch Bank significantly expanded coverage of their midstream energy sector, adding 17 names to their coverage universe. The analysts noted that the midstream sector has grown from 40 public names to 130 currently. Among the bank's top picks: Energy Transfer Equity LP ETE, Phillips 66 Partners LP PSXP, Kinder Morgan Inc KMI and Markwest Energy Partners LP MWE. The analysts chose these names because they see the most potential in "names with high growth, multi-year visibility, stable cash flows, high coverage, IG ratings, and aligned management or sponsor interests."

Deutsche Bank said that growth in oil and gas production creates a "massive need" for energy infrastructure, giving the industry a long-term secular tailwind. The analysts forecasted that the crude logistics, NGL infrastructure and large cap diversified names will be the main beneficiaries of this tailwind.

Specifically, these names include Phillips 66 Partners, Global X MLP & Energy Infrastructure ETF MLPX, Valero Energy Partners LP VLP, and Tesoro Logistics LP TLLP in the crude logistics category.

In NGL infrastructure, Deutsche said that Energy Transfer Equity, Sunoco Logistics Partners L.P. SXL and Markwest Energy Partners will benefit.

Finally, among large cap diversified companies, Deutsche Bank said it prefers Kinder Morgan and Enterprise Products Partners L.P. EPD.

Deutsche Bank said that it was less constructive on "E&P MLPs, variable-rate refining MLPs, and gas storage names." The company initiated Sell ratings on ONEOK, Inc. OKE and Oneok Partners LP OKS.