USA Compression Partners Reports Record Q1
With the war in Iran, oil and gas has been the sector to beat in 2026. It’s the top performing sector in 2026 (+26%) and trails Technology just slightly on an annual basis (+42%).
With a deal to end the war seemingly always on the horizon, it’s fair to say that uncertainty is going to continue. But when an end to the war comes, then what? A rising tide lifts all boats and many once bullish energy stocks will take a breather.
While its great to ride the energy wave, it’s also a good idea to look at oil and gas companies that were doing well before the war and are expected to after the war ends. And that’s where USA Compression Partners (NYSE:USAC), a provider of energy infrastructure services, come in.
Why? Energy companies always need their infrastructure serviced.
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. (Source: “Investor Presentation,” USA Compression Partners, May 5, 2026.)
It 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, 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 at two-to-five years. This essential service has helped USA Compression generate stable cash flows during all commodity cycles.
Record Revenue and Adjusted EBITDA
USA Compression shareholders will never tire about hearing it report record financial results. For the first quarter ended March 31, 2026, USA Compression announced that revenue increased approximately 35% to a record $331.3 million. (Source: “USA Compression Partners Reports First-Quarter 2026 Results; Confirms 2026 Outlook,” USA Compression Partners, LP, May 5, 2026.)
Net income jumped 87% on an annual basis to $38.3 million, while net cash provided by operating activities climbed to $38.3 million. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) was up 26% at a record $188.6 million. Distributable cash flow climbed to $130.8 million with distributable cash flow coverage of 1.72 times.
Commenting on the record results, Clint Green, President and CEO said, “Since closing the highly accretive J-W Power Acquisition on January 12, our first quarter results reflect improvement in metrics for leverage, cash flow and distribution coverage.”
“Looking ahead, we remain focused on executing consistently, generating reliable cash flows that support our distribution, and building on first quarter momentum throughout 2026.”
2026 Business Guidance
Looking ahead to 2026, management expects to report:
- Adjusted EBITDA in the range of $770.0 million to $800.0 million
- Distributable Cash Flow of $480.0 million to $510.0 million
50+ Consecutive Quarters of Stable or Increased Payouts
Investors love limited partnerships 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 IPO in 2013, it 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 first quarter, it reported distributable cash flow of $130.8 million, with distributable coverage of 1.72 times. That’s more than enough to cover its distribution payments.
It currently pays a dividend of $0.525 per unit, or $2.10 on an annual basis, for a yield of approximately eight percent.
USAC Units Hit Record High
Lots of companies have high dividend yields because their share price has taken a hit. That’s because dividend yield and share price have an inverse relationship. That dynamic is not why USAC units have a high yield. USAC units are trading at record levels.
On May 19, USAC units hit a record high of $30.55. They have given up some ground but continue to trade near that level at $27.84. That puts USAC units up:
- 20% over the last month
- 26% year to date
- 17% on an annual basis
Fresh highs could be in the cards. Wall Street analyst’s have provided a 12-month target of $29.50 to $33.00 per unit. This points to potential upside of 5.6% to 18.2%.
Chart courtesy of StockCharts.com
The Lowdown on USA Compression Partners LP
USA Compression Partners LP continues to be a great energy stock 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 reported record results in 2023, 2024, and 2025 with that momentum carrying into 2026, with record first quarter revenue and Adjusted EBITDA. It also provided record guidance for 2026.
On the passive income front, it has paid a stable, growing payout for more than 50 quarters.