USA Compression Partners Has “Exceptional Year”
Today’s stock in the spotlight is USAC stock.
Crude oil and gas prices are trading at yearly highs due to the war in Iran and ongoing geopolitical uncertainty. And that has put energy stocks back on the radar of Wall Street. But, it’s important to remember that some energy stocks are in demand whether the energy sector is bullish or bearish. One great example of this is USA Compression Partners LP (NYSE:USAC), a provider of energy infrastructure services.
These stocks remain in demand because, regardless of where oil and gas prices are, energy companies always need their infrastructure serviced.
About USA Compression Partners
Dallas-Texas-based USA Compression Partners is one of the country’s largest independent providers of natural gas compression services. It has a major operating presence in each of the gas growth basins in the U.S., including the Marcellus/Utica, DJ Basin, Gulf Coast, Permian, and Barnett/Haynesville basins. (Source: “Investor Presentation,” USA Compression Partners, March 2, 2026.)
USA Compression provides its services under fixed-term contracts to oil and gas companies, including independent producers, processors, gatherers, and transporters of natural gas and crude oil.
Due to distance and friction, natural gas loses pressure as it moves through pipelines. Compression ensures that the gas continues to move smoothly through pipelines. Compressors are also used at above-ground and underground natural gas storage facilities.
And them there are the company’s fixed-fee, take-or-pay contracts that provide it with consistent cash flows. On top of that, the majority of contract terms are set at two to five years. This essential service has helped USA Compression generate stable cash flows during all commodity cycles.
USA Compression Makes Blockbuster Acquisition
In January, USA Compression Partners completed the previously announced $860.0-million acquisition of J-W Power Company. (Source: “USA Compression Partners LP Completes Acquisition of J-W Power Company,” USA Compression Partners LP, January 12, 2026.)
Some of the strategic and financial benefits of this acquisition include:
- Expanded Scale: Creates a combined fleet of approximately 4.4 million active horsepower.
- Enhances Geographic Diversification: Adds over 0.8 million active horsepower across key regions including the Northeast, Mid-Con, Rockies, Gulf Coast, Bakken and Permian Basin.
- Increased Customer Base: Highly diversified, high-quality customer base with long-term relationships.
- Immediate Financial Impact: Meaningful near-term accretion on a distributable cash flow basis.
- Valuation: Attractive ~5.8x 2026 estimated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple before expected synergies.
Commenting on the acquisition, Clint Green, USA Compression’s president and chief executive officer, said, “This acquisition represents a milestone step for USAC. The combined entity will deliver meaningful scale, broaden customer relationships, and enhance our ability to service the growing demand for natural gas compression.”
Record Financial Results
In 2024, USA Compression Partners reported record results. That strong momentum continued in 2025. In the fourth quarter, the company reported record total revenue of $252.2 million. (Source: “USA Compression Partners Reports Fourth-Quarter 2025 Results and Provides 2026 Outlook; Achieves Record Results,” USA Compression Partners LP, February 17, 2026.)
The company’s net income increased to $27.8 million, while its net cash provided by operating activities advanced to $139.5 million. Its adjusted EBITDA were $154.4 million, and distributable cash flow climbed to $103.2 million with distributable cash flow coverage of 1.36 times.
Commenting on the record results, Green, “Our operations and commercial teams continued to deliver for customers day in and day out, while our back-office teams successfully navigated the transition to a shared-services model.
“These efforts produced record adjusted EBITDA and distributable cash flow in 2025 and laid the foundation for strong momentum in 2026, further bolstered by the January closing of the J-W acquisition.”
2026 Business Outlook
Looking ahead to 2026, USA Compression’s management expects to report:
- Adjusted EBITDA in the range of $770.0 million to $800.0 million, compared to $613.7 million in 2025 and $584.2 million in 2024
- Distributable cash flow of $480.0 million to $510.0 million, versus $385.6 million in 2025 and $355.3 million in 2024.
50 Consecutive Quarters of Stable or Increased Payouts
Investors love a limited partnership like USA Compression, because it has to generate 90% of its income through activities or interest and dividend payments related to natural resources.
This results in some of the biggest, most reliable dividends on Wall Street.
Since Its initial public offering (IPO) in 2013, USAC stock has never missed or lowered its dividend payout. It has also returned in excess of $1.6 billion in cash to unitholders. (Source: “Distributions & Splits,” USA Compression Partners LP, last accessed March 17, 2026.)
In the fourth quarter, USA Compression Partners reported distributable cash flow of $103.2 million, with distributable coverage of 1.36 times. That’s more than enough to cover its distribution payments.
USAC stock currently pays a dividend of $0.525 per unit, or $2.10 on an annual basis, for a yield of approximately eight percent.
USAC Stock at Record Levels
Record financial results and strong guidance have been helping juice USAC stock. On March 17, it hit a fresh record high of $28.65 per share. The stock is also significantly outpacing the broader market.
As of this March 17 writing, USAC stock is trading up:
- 9% over the last month
- 25% year to date
- 14.5% on an annual basis
Chart courtesy of StockCharts.com
The Lowdown on USAC Stock
USA Compression Partners LP continues to be a great energy company that provides natural gas compression services in each of the gas growth basins in the U.S. This helps provide it with secure, stable cash flows.
The company just completed a transformative acquisition and reported record results in 2025. It also provided strong adjusted EBITDA and distributable cash flow guidance for 2026.
On the passive income front, it has paid a dividend for 50 straight quarters with stable or increased distributions. Over the last five years, with dividends reinvested, it has provided total equity return of 205%, outperforming benchmarks.