USAC

USA Compression Partners ($USAC) Director Bets $235K After Earnings, Embracing 9% Yield Despite High Debt Concerns

05/08/2025 21:28

USA Compression Partners ($USAC) Director Bradford Whitehurst has purchased shares worth approximately $235,315 on May 8, acquiring 10,000 shares at $23.53 per share through the company's Distribution Reinvestment Plan. This transaction is particularly noteworthy as it comes after $USAC's stock price retreated from its mid-February 2025 peak of around $29. The director's purchase, occurring as the stock stabilized around the $23 level following a sharp drop in early April, may signal an insider's positive outlook at current price levels. USA Compression Partners is a leading provider of natural gas compression services in the United States, serving oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil. Headquartered in Dallas, Texas, the company operates a fleet of compression units with over 3.86 million horsepower across various unconventional resource plays, including major shale formations like the Permian and Marcellus. Whitehurst's purchase stands in contrast to significant insider selling in 2024. Last June, major shareholder EIG VETERAN EQUITY AGGREGATOR sold approximately 2.78 million shares in a single transaction worth about $64 million, while in August 2024, Officer Eric D. Long sold around 23,000 shares (worth approximately $510,000) held in trusts he managed. $USAC recently reported its Q1 2025 earnings on May 6, posting revenue of $245.23 million, representing a 7% increase year-over-year. However, the company's earnings per share (EPS) came in at $0.18, falling short of the expected $0.22. While this may raise concerns about quarterly performance consistency, the overall revenue growth trend remains positive. The company projects its 2025 EBITDA to be between $590 million and $610 million and maintains a high utilization rate of 94.4%. Management also disclosed plans to expand by ordering approximately 40,000 new horsepower units expected to be delivered by year-end. One of $USAC's most attractive features is its robust dividend yield of 9.09%, which appeals particularly to income-focused investors. However, investors should be mindful of the company's high debt ratio, which stands at approximately 91% of total assets. This high leverage could pose risks in a volatile market environment. From a stock performance perspective, $USAC has delivered an impressive five-year return of 163.42%, despite a 6.47% decline over the past year. The stock currently trades at a TTM P/E ratio of 32.71 and a forward P/E of 23.64. Analysts have mixed views on the stock, with price targets ranging from $22.00 to $30.00. Whitehurst's recent purchase is especially significant as it follows closely on the heels of the company's quarterly earnings release, potentially indicating management's confidence in the current business conditions and future outlook. The method of purchase—through a dividend reinvestment plan—also demonstrates faith in the company's dividend policy. $USAC presents a compelling investment opportunity for those seeking exposure to the energy sector, particularly in natural gas compression services. While the company has demonstrated strong revenue growth and operational efficiency, potential investors should carefully weigh the risks associated with high leverage and recent earnings volatility against the attractive dividend yield and long-term growth prospects.

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