Höegh LNG Partners Preferred Units: Strong Fundamentals And Juicy 13.3% Distribution Yield (Upgrade)

2025-02-06 16:08:23 ET

Summary

• Following its delisting from the NYSE in late 2022, Höegh LNG Partners' Series A Preferred Units are trading on the OTC Expert Market with limited access for retail investors.
• While the price has recovered in recent quarters, the preferred units are still trading at a large discount to its $25 liquidation preference thus resulting in a juicy 13.3% yield.
• In recent years, the partnership's financial condition has improved considerably. In addition, an amicable settlement in Q1/2024 resulted in $35 million in previously restricted cash becoming available.
• With the partnership's cash generation a multiple of its preferred distribution obligations, preferred unitholders won't have to worry about their distributions anytime soon.
• Considering Höegh LNG Partners' decent contract coverage, strong cash generation and vastly improved financial condition, I am upgrading the company's Series A Preferred Units from "Hold" to "Buy".

Note:

I have covered Höegh LNG Partners LP ( OTC:HMLPF ) previously, so investors should view this as an update to my earlier articles on the company. ...

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