CQP

Cheniere Energy Partners owns the Sabine Pass LNG export facility and runs a genuinely high-quality cash machine: FY2025 revenue grew 23.6% to $10.8B, net income rose 19.0% to $2.99B, and margins are excellent for the sector at 34.4% operating and 27.8% net. The business is built on long-term counterparty arrangements that, in management's words, 'provide us with significant, stable, long-term cash flows' — and the credit market agrees, with Fitch upgrading CQP to BBB and S&P stepping it up twice to BBB+ in 2025 with a positive outlook on SPL. Operating cash flow of $2.77B comfortably funds the $3.29/unit of declared distributions, and at $58.05 that payout implies roughly a 5.7% yield, the core of the investment case.

The balance sheet is the central caveat. Total liabilities of $17.0B sit against $17.4B of assets, leaving a razor-thin ~$0.4B equity sliver, with $14.2B of long-term debt plus $306M current, and only $182M of cash (down 32.6%). That is normal for a contracted infrastructure MLP and is being actively managed — SPL redeemed its 2026 notes and termed out debt with a $1.0B 5.550% 2035 issue — but it leaves little margin for error and makes the distribution sensitive to refinancing costs and earnings. The MLP structure also carries Incentive Distribution Rights that hand the general partner up to 50% of marginal cash above the top tier, a structural drag on the upside common unitholders capture as distributions grow.