NEW YORK (TheStreet) -- Shares of Regency Energy Partners are up 7.24% to $25.47 after Energy Transfer Partners agreed to merge with the pipeline company in a deal that values Regency Energy at about $18 billion including debt and liabilities, the companies said. This merger will create substantial cost savings, capital efficiencies and valuable ancillary benefits, the companies noted, as well as strengthen the overall growth platform for the combined company. The opportunities from this merger include not only the broader midstream footprint in Texas, but also the Marcellus and Utica shale plays in Appalachia, where Regency's "extremely attractive and well-positioned" operations and growth projects complement ETP's Rover interstate gas, which will create over 3 Bcf/day of natural gas takeaway capacity from these plays, the companies said. Exclusive Report: Jim Cramer's Best Stocks for 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. The transaction is expected to close in the second quarter of 2015. Separately, TheStreet Ratings team rates REGENCY ENERGY PARTNERS LP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation: "We rate REGENCY ENERGY PARTNERS LP (RGP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: RGP's very impressive revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues leaped by 123.0%. Growth in the company's revenue appears to have helped boost the earnings per share. The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 164.1% when compared to the same quarter one year prior, rising from $39.00 million to $103.00 million. REGENCY ENERGY PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, REGENCY ENERGY PARTNERS LP reported lower earnings of $0.03 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.03). The gross profit margin for REGENCY ENERGY PARTNERS LP is rather low; currently it is at 20.43%. Regardless of RGP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RGP's net profit margin of 6.94% compares favorably to the industry average. RGP has underperformed the S&P 500 Index, declining 13.70% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry. You can view the full analysis from the report here: RGP Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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