DT Midstream (DTM) Stock Price, News & Analysis

DT Midstream, Inc. (NYSE: DTM) is a natural gas midstream company that owns, operates and develops interstate and intrastate pipelines, storage and gathering systems, and related compression, treatment and surface facilities. According to the company’s disclosures, it provides integrated natural gas transportation, storage and gathering services across the Southern, Northeastern and Midwestern United States and Canada. DT Midstream is based in Detroit, Michigan and operates in the pipeline transportation of natural gas segment within the broader transportation and warehousing sector.

Core business and operations

DT Midstream’s assets include natural gas interstate and intrastate pipelines, underground storage systems, lateral pipelines and gathering systems, along with associated treatment plants and compression and surface facilities. The company states that it transports natural gas for utilities, power plants, marketers, large industrial customers and energy producers. Its operations are organized around two primary segments: Pipeline and Gathering, which reflect long-haul transmission and regional gathering and related services.

The company’s pipeline, storage and gathering systems are described as being located in the Midwestern U.S., Eastern Canada, Northeastern U.S. and Gulf Coast regions. Within this footprint, DT Midstream highlights a "wellhead-to-market" array of services that connect production areas to demand centers. Assets referenced in company communications include the Guardian Pipeline, Midwestern Gas Transmission pipeline and Vector Pipeline, which are interconnected and serve key demand centers in regions such as Wisconsin and the Upper Midwest.

Guardian Pipeline and regional positioning

DT Midstream reports that Guardian Pipeline, L.L.C. is an approximately 260-mile interstate pipeline with current capacity of about 1.3 Bcf per day and is 100% owned by DT Midstream. Guardian is interconnected to the company’s Midwestern Gas Transmission pipeline and Vector Pipeline and serves key Wisconsin demand centers. DT Midstream has announced expansion plans for Guardian, including the "G3" expansion, which is expected to increase Guardian’s capacity by approximately 40% based on awarded expansion capacity.

The company has also reported progress on other organic projects, such as the LEAP Phase 4 expansion project and a new power plant lateral from Midwestern Gas Transmission. These projects are referenced by management as part of an organic project backlog that DT Midstream is executing and advancing over time.

Customer base and services

According to DT Midstream’s public descriptions, the company transports natural gas for utilities, power plants, marketers, large industrial customers and energy producers. Its services include natural gas transportation, storage and gathering, delivered through integrated systems that connect production at or near the wellhead to downstream markets. The company describes its offering as a wellhead-to-market array of services, reflecting its role in moving natural gas from production regions to end-use markets across its U.S. and Canadian footprint.

Business segments and geography

DT Midstream indicates that it operates through two main segments: Pipeline and Gathering. The Pipeline segment includes interstate and intrastate pipelines, storage systems and related facilities, while the Gathering segment includes gathering systems and associated treatment plants and compression facilities. The company notes that it generates revenue from pipeline, storage and gathering systems that are substantially located in the Midwestern U.S., Eastern Canada, Northeastern U.S. and Gulf Coast regions.

Financial measures and performance metrics

In its earnings releases and SEC filings, DT Midstream emphasizes several non-GAAP financial measures that it uses to evaluate performance and communicate with investors:

• Operating Earnings – DT Midstream states that Operating Earnings exclude non-recurring items, certain mark-to-market adjustments and discontinued operations. Management indicates that this measure is used as the primary performance metric for external communications and to measure performance against budget internally.
• Adjusted EBITDA – Defined by the company as GAAP net income attributable to DT Midstream before interest, taxes, depreciation and amortization and loss from financing activities, further adjusted to include the proportional share of net income from equity method investees (excluding interest, taxes, depreciation and amortization) and to exclude certain non-routine items. DT Midstream notes that this measure is frequently used in the midstream industry to evaluate operating performance.
• Distributable Cash Flow (DCF) – DT Midstream explains that DCF is calculated by adjusting Net Income Attributable to DT Midstream for items such as earnings from equity method investees, depreciation and amortization attributable to noncontrolling interests, cash interest expense, maintenance capital investment and cash taxes, and adding back interest expense, income tax expense, depreciation and amortization, certain non-routine items and dividends and distributions from equity method investees. The company states that DCF is used to estimate the ability of its assets to generate cash earnings after servicing debt, paying cash taxes and making maintenance capital investments.

DT Midstream regularly reports net income, Operating Earnings and Adjusted EBITDA in its quarterly and annual results, and provides reconciliations of non-GAAP measures to reported net income in its earnings releases.

Capital structure and credit profile

DT Midstream has disclosed that it has achieved an investment grade credit rating with major credit rating agencies. The company has reported upgrades by Fitch Ratings, Moody’s Ratings and S&P Global Ratings to investment grade levels with stable outlooks. Management has described the achievement of investment grade status as a strategic goal and notes that these ratings reflect the strength of its balance sheet and the quality and scale of its business.

Growth projects and organic backlog

In its public communications, DT Midstream highlights an organic project backlog that includes expansions and modernization projects across its pipeline and gathering systems. Examples referenced by the company include:

• Final investment decision on the Guardian Pipeline "G3" expansion, which is expected to increase Guardian’s capacity by approximately 40%.
• Placing the LEAP Phase 4 expansion project in service ahead of schedule and on budget.
• Modernization initiatives across newly acquired interstate pipelines.
• Construction of a new power plant lateral from Midwestern Gas Transmission.

DT Midstream also reports that it has executed agreements for projects that will serve utility-scale power generation, reflecting demand for natural gas transportation to power generation customers within its service areas.

Dividend policy

DT Midstream’s earnings releases and Form 8-K filings indicate that its Board of Directors has declared quarterly cash dividends on its common stock. The company discloses dividend amounts per share and record and payment dates in these communications, and references the use of Distributable Cash Flow as a measure of the ability of its assets to support discretionary uses such as common stock dividends, retirement of debt or expansion capital expenditures.

Sustainability and emissions goals

DT Midstream states that it is transitioning towards net zero greenhouse gas emissions by 2050, with a plan to achieve 30% of its carbon emissions reduction by 2030. The company also references efforts to develop low carbon business opportunities and deploy greenhouse gas reducing technologies, and notes that changes in environmental laws and regulations, including those relating to pipeline safety, climate change and greenhouse gas emissions, are among the risk factors that can affect its business.

Risk factors and regulatory environment

In its forward-looking statement disclosures, DT Midstream lists a wide range of factors that may impact its results, including changes in general economic conditions, demand for natural gas gathering, transmission, storage and transportation services, availability and price of natural gas relative to competing fuels, regulatory and environmental requirements, cybersecurity risks, natural disasters, geopolitical events and other operational and financial risks. The company directs readers to the "Risk Factors" section of its Annual Report on Form 10-K and other SEC filings for a more detailed discussion of these risks.

Stock information and corporate structure

DT Midstream, Inc. is incorporated in Delaware and its common stock trades on the New York Stock Exchange under the ticker symbol DTM. The company files periodic reports, including Forms 10-K, 10-Q and 8-K, with the U.S. Securities and Exchange Commission. These filings provide additional detail on its operations, financial performance, risk factors and corporate governance.

How DT Midstream fits within the natural gas value chain

Based on its own descriptions, DT Midstream operates in the midstream segment of the natural gas value chain, focusing on gathering gas from production areas, transporting it through interstate and intrastate pipelines, and providing storage services that help balance supply and demand. Its customer base of utilities, power plants, marketers, large industrial customers and energy producers reflects its role as a connector between upstream production and downstream consumption across multiple regions in the U.S. and Canada.