| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 28.30 | 9 |
| Intrinsic value (DCF) | 11.22 | -57 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 17.56 | -32 |
USA Compression Partners, LP (NYSE: USAC) is a leading provider of natural gas compression services in the U.S., specializing in infrastructure applications such as centralized natural gas gathering systems and processing facilities. Founded in 1998 and headquartered in Austin, Texas, USAC operates a large compression fleet, serving oil companies, independent producers, and midstream operators. The company plays a critical role in the energy sector by ensuring efficient natural gas transportation and processing, supporting domestic energy production. With a market cap of approximately $2.94 billion, USAC is positioned as a key player in the Oil & Gas Equipment & Services industry. Its revenue model is anchored in long-term contracts, providing stable cash flows and supporting its attractive dividend yield. As demand for natural gas infrastructure grows, USAC remains well-positioned to capitalize on industry trends.
USA Compression Partners (USAC) presents a compelling investment case due to its stable revenue streams from long-term contracts and its essential role in natural gas infrastructure. The company’s $2.1 annual dividend per share offers an attractive yield, supported by strong operating cash flows ($341.3M in the latest period). However, risks include high leverage (total debt of $2.51B) and exposure to commodity price volatility, which could impact customer spending. With a low beta (0.512), USAC is relatively less volatile than the broader market, making it a potential defensive play in the energy sector. Investors should weigh its dividend sustainability against its debt levels and industry cyclicality.
USA Compression Partners (USAC) holds a competitive advantage through its large-scale compression fleet and focus on infrastructure applications, which provide stable, recurring revenue. The company’s long-term contracts with midstream operators and producers enhance cash flow visibility. Unlike some competitors that diversify into drilling or completions, USAC’s specialization in compression services allows for operational efficiency and deep industry expertise. However, its high debt load could limit financial flexibility compared to peers with stronger balance sheets. The company’s growth is tied to natural gas demand, which is buoyed by LNG exports and domestic consumption but remains sensitive to regulatory and environmental pressures. USAC’s scale and customer relationships position it well, but competition from larger diversified service providers could pressure margins.