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1. Company Snapshot

1.a. Company Description

Western Midstream Partners, LP, a midstream energy company, together with its subsidiaries, acquires, owns, develops, and operates primarily in the United States.It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water.It also buys and sells natural gas, NGLs, and condensate.


The company operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania.Western Midstream Holdings, LLC operates as the general partner of the company.The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019.


Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas.

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1.b. Last Insights on WES

Western Midstream Partners' recent performance was driven by robust operational results, generating $1.375 billion in free cash flow, which comfortably funded distributions and supported future growth initiatives. The company's organic growth pipeline, including North Loving II and a new water pipeline, positions it for continued expansion. Record full-year financial results, driven by strength in Delaware and DJ, also contributed to its performance. Additionally, the integration of the Aris Water Solutions acquisition progressed well.

1.c. Company Highlights

2. Western Midstream Partners' Q4 2025 Earnings: A Strong Finish to a Record Year

Western Midstream Partners (WES) reported a strong Q4 2025, with adjusted EBITDA reaching a record $636 million, driven by increased crude oil and NGL throughput in the Delaware Basin, the contribution of 2.5 months of produced water volumes from the Aris acquisition, and reduced operation and maintenance expenses. The company's adjusted EBITDA for the quarter was negatively impacted by $120 million in transaction costs from the Aris acquisition. Excluding these costs, adjusted EBITDA would have been $665 million, a 5% increase from the previous quarter. For the full year 2025, WES reported record adjusted EBITDA of $2.48 billion and record free cash flow of $1.53 billion. The actual EPS for the quarter came in at $0.47, below estimates of $0.91.

Publication Date: Feb -23

📋 Highlights
  • Record 2025 Adjusted EBITDA:: $2.48 billion, exceeding guidance midpoint, driven by 2.5 months of Aris acquisition integration and throughput growth.
  • 2026 EBITDA Guidance:: $2.5–2.7 billion (midpoint $2.6B), reflecting 5% YoY growth despite lower production in key basins.
  • Aris Acquisition Impact:: Boosted 2025 water throughput by 80% YoY, delivered $40M cost synergies, with 85% savings targeted by Q1 2026.
  • 2026 Capital Efficiency:: Reduced capital expenditure to $925M, aligning with $1.85–2.05B distributable cash flow and 3% distribution increase.
  • Water Business Growth:: Expected to outpace oil/gas segments (mid-single digits), underpinned by Aris’ integration and Permian Basin investments.

Operational Highlights

The Aris acquisition contributed meaningfully to WES's financial performance, with $40 million of targeted cost synergies achieved, and 85% of those savings expected to be realized by the end of Q1 2026. The company's produced water throughput is estimated to increase by over 80% year-over-year, driven by the Aris acquisition. WES expects moderate rates of growth for overall throughput and adjusted EBITDA in 2026, with adjusted EBITDA growth of 5% at the midpoint of its guidance range.

Valuation and Dividend

With a P/E Ratio of 14.07 and an EV/EBITDA of 10.8, WES's valuation appears reasonable. The company's Dividend Yield is 8.86%, indicating an attractive return for income investors. The company's distribution coverage is expected to be around 5% EBITDA growth this year, with a 2% increase in distribution. WES intends to recommend a distribution increase of $0.02 per unit starting with the first quarter distribution in 2026.

Growth Prospects

WES sees an opportunity for growth in the Permian Basin, particularly with the Pathfinder project, which has seen increased interest and improved returns due to a commercial transaction late last year. The company's water business is expected to have a higher growth rate than its gas and oil businesses, with long-term growth potentially in the mid-single digits. Analysts estimate next year's revenue growth at 9.3%, indicating a positive outlook for the company.

New Ventures

WES is exploring opportunities in CO2 and power, with a focus on building out infrastructure to support growth in these areas. The company has set up a new ventures group to explore long-term opportunities, particularly in unconventional EOR and power generation. The company sees potential for growth in these areas and is hopeful that they will become significant contributors to its business in the coming years.

3. NewsRoom

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Western Midstream: The Best Yield In Midstream

Mar -04

Source: seekingalpha.com

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Iran Attack Will Launch Energy Stocks – 5 Strong Buy High-Yield Companies You Have To Own

Feb -28

Source: 247wallst.com

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The Ultimate 8%-Yielding 'Sleep-Well-At-Night' Retirement Income Machine

Feb -27

Source: seekingalpha.com

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Smart Income: Thank You For The Dividends

Feb -27

Source: seekingalpha.com

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WES Q4 Earnings Miss on Lower Throughput & Higher Expenses

Feb -24

Source: zacks.com

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Western Midstream Partners, LP Common Units (WES) Discusses Fourth Quarter Performance, Cost-Cutting Initiatives, and Growth Strategy Progress Transcript

Feb -24

Source: seekingalpha.com

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Western Midstream Partners Q4 Earnings Call Highlights

Feb -24

Source: defenseworld.net

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Investing $3,000 Into These 3 Ultra-High-Yielding Dividend Stocks Could Generate Hundreds of Dollars in Annual Passive Income

Feb -23

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.44%)

6. Segments

Service - Fee Based

Expected Growth: 2.5%

Western Midstream Partners, LP's 2.5% growth in Service - Fee Based segment is driven by increasing demand for midstream services, expansion of existing contracts, and strategic acquisitions. Additionally, the partnership's focus on fee-based revenue streams and cost savings initiatives contribute to its steady growth.

Service - Product Based

Expected Growth: 1.8%

Western Midstream Partners, LP's 1.8% growth in Service-Product Based segment is driven by increasing demand for midstream services, expansion of existing assets, and strategic acquisitions. Additionally, growing production in the Permian Basin and DJ Basin, where the company operates, contributes to the growth. Furthermore, the company's focus on cost savings and operational efficiencies also supports the growth.

Product

Expected Growth: 2.2%

Western Midstream Partners, LP's 2.2% growth is driven by increasing natural gas production in the Permian Basin, supported by strong demand from LNG exports and power generation. Additionally, the partnership's fee-based contracts and diversified customer base provide a stable source of revenue, while ongoing cost savings initiatives and strategic acquisitions further enhance growth prospects.

Other

Expected Growth: 1.5%

Western Midstream Partners, LP's 1.5% growth is driven by increasing natural gas production in the Permian Basin, supported by strong demand from LNG exports and power generation. Additionally, the partnership's diversified customer base, fee-based contracts, and expansion projects contribute to its stable cash flows and growth prospects.

7. Detailed Products

Natural Gas Gathering

Western Midstream Partners, LP provides natural gas gathering services, which involve the collection of natural gas from various wells and transportation to processing facilities or transmission pipelines.

Natural Gas Processing

The company offers natural gas processing services, which involve the separation of natural gas liquids (NGLs) from natural gas, and the extraction of NGLs, such as ethane, propane, and butane.

NGL Transportation

Western Midstream Partners, LP provides NGL transportation services, which involve the transportation of NGLs from processing facilities to fractionation facilities or storage hubs.

NGL Fractionation

The company offers NGL fractionation services, which involve the separation of NGLs into their individual components, such as ethane, propane, and butane.

Crude Oil Gathering

Western Midstream Partners, LP provides crude oil gathering services, which involve the collection of crude oil from various wells and transportation to storage facilities or refineries.

Water Gathering and Disposal

The company offers water gathering and disposal services, which involve the collection and disposal of produced water from oil and gas wells.

8. Western Midstream Partners, LP's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Western Midstream Partners, LP is medium due to the availability of alternative energy sources and the increasing demand for renewable energy.

Bargaining Power Of Customers

The bargaining power of customers for Western Midstream Partners, LP is low due to the company's strong market position and the lack of alternative suppliers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Western Midstream Partners, LP is medium due to the company's dependence on a few key suppliers and the high switching costs.

Threat Of New Entrants

The threat of new entrants for Western Midstream Partners, LP is low due to the high barriers to entry, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry for Western Midstream Partners, LP is high due to the competitive nature of the energy industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.13%
Debt Cost 4.56%
Equity Weight 26.87%
Equity Cost 17.61%
WACC 8.07%
Leverage 272.10%

11. Quality Control: Western Midstream Partners, LP passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Western Midstream Partners

A-Score: 7.8/10

Value: 5.9

Growth: 6.6

Quality: 9.0

Yield: 10.0

Momentum: 6.0

Volatility: 9.3

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Plains All American Pipeline

A-Score: 7.1/10

Value: 9.0

Growth: 3.6

Quality: 5.5

Yield: 10.0

Momentum: 5.0

Volatility: 9.3

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International Seaways

A-Score: 7.0/10

Value: 6.3

Growth: 8.2

Quality: 6.9

Yield: 10.0

Momentum: 4.5

Volatility: 6.0

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Plains GP Holdings

A-Score: 6.7/10

Value: 7.6

Growth: 3.6

Quality: 5.1

Yield: 10.0

Momentum: 4.5

Volatility: 9.3

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DT Midstream

A-Score: 6.5/10

Value: 3.3

Growth: 5.8

Quality: 6.4

Yield: 7.0

Momentum: 8.0

Volatility: 8.7

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EnLink Midstream

A-Score: 4.5/10

Value: 2.5

Growth: 5.4

Quality: 2.7

Yield: 4.0

Momentum: 5.5

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

42.28$

Current Price

42.28$

Potential

-0.00%

Expected Cash-Flows