Tallgrass Energy Expects Cash Distributions To Grow 2x The Distribution Growth Rate Of Its Cash Distributions

Tallgrass Energy Partners, LP TEP revealed that it continued to expect its cash distributions to Class A shareholders to increase at two times of the distribution growth rate of its cash distributions. The company came out with an updated guidance for the fiscal year 2016 due to its recent acquisition of a 25 percent membership interest in Rockies Express Pipeline LLC.

As far as its outlook until 2018 is concerned, Tallgrass Energy sees distributable cash flow between $345 and $375 million. The company also sees distribution coverage of 1.15 – 1.20 x for the current year. The company expects its annualized distribution for the current year to witness about 27–30 percent growth.

Aside from that, the energy partner sees a minimum average compounded annualized distribution growth pace of at least 20 percent for years 2017 and 2018. Its management plans to recommend that its board to boost its quarterly distributions for the second and third quarters of the current year by a total of about $0.09 per unit over its distribution of $0.705 per unit in the first quarter.

On Tuesday, the stock traded 4.01 percent higher.