Chicago Bridge & Iron Company N.V. (CBI), Fluor Corporation (NEW) (FLR): Stocks Set to Benefit From LNG Exports

Earlier this month, Deutsche Bank initiated coverage on the stock with a Buy rating and a price target of $84, indicating potential upside of 27%.

Beyond construction plays

Another player set to benefit from the relaxed norms is Teekay LNG Partners L.P. (NYSE:TGP), which offers international transportation services for LNG in addition to liquefied petroleum gas (LPG ) and crude oil. The Energy Department’s stance indicates that more such licenses will be rolled out, thus increasing business volumes for transporters like Teekay LNG Partners L.P. (NYSE:TGP).

As of Dec. 31, 2012, the company’s fleet consisted of 27 LNG carriers. With a young fleet that has an average age of six years as of year end, the company was able to boost its margins from 25.6% in 2011 to 35.5% last year. This improvement in margins is substantial, and even though margins simply cannot keep going up, current levels are good enough to be maintained.

The company has a debt equity ratio of 1.69, which is not very high for this capital intensive business and will support margins to stay at healthy levels. Despite its vastly improved results and margins from previous year, the stock has gained only 18% over the last 12 months but offers an excellent dividend yield in excess of 6%.

Foolish bottom line

Even though the Energy Department said it would move cautiously on additional approvals, oil and gas industry groups are expected to lobby hard to open the door a bit more. The positives such as job creation and reduction of the U.S. trade deficit which played in favor of Freeport will likely bring more export volumes.

The article Stocks Set to Benefit From LNG Exports originally appeared on Fool.com is written by Jacob Wolinsky.

Jacob Wolinsky has no position in any stocks mentioned. The Motley Fool owns shares of Fluor. Jacob is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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