Buy This 254% Winner Ready For Its Next Upside Move

| December 17, 2025
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On December 8, Antero Resources (AR) and Antero Midstream (AM) announced a pair of transformational deals. The moves should be positive for both stocks.

Antero Resources is a natural gas producer with operations primarily in the Marcellus shale. The company announced an agreement to acquire the upstream assets of HG Energy II, LLC, for $2.8 billion in cash, plus the assumption of HG Energy’s commodity hedge book.

Antero Resources also announced an agreement to sell its Ohio Utica Shale upstream business to Infinity Natural Resources for $800 million.

Getting right to the bottom line, Antero Resources expects these transactions to increase average free cash flow by more than 30% over the next two years.

As part of the transaction, Antero Midstream will acquire HG Energy’s HG II Energy Midstream Holdings for $1.1 billion. The Ohio Utica Shale midstream assets will be sold for $400 million.

Here are some benefits of the midstream assets acquisition:

  • The HG Energy assets are contiguous to the Antero Midstream system, making the purchase a bolt-on acquisition
  • Management has identified over $100 million in future capital avoidance synergies
  • The transaction is estimated to be immediately accretive to free cash flow after dividends by more than 15%

Antero Midstream has been a recommended investment to subscribers of my Velocity Report since May 2017. Coming out of the pandemic, AM has delivered attractive yields and strong returns for investors. The five-year total return has been 254%.

My beef with Antero Midstream is that the company has paid the same dividend since the first quarter of 2021. Management has focused on paying down debt to achieve a target debt-to-EBITA leverage of 3.0 times. Despite not growing its dividend, the AM share price is up 140% over the last five years.

As of the third quarter, debt-to-EBITDA was down to 2.7 times. This acquisition will boost free cash flow. I would love to see the company return to dividend growth.

This post originally appeared at Investors Alley.

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Category: Dividend Stocks To Buy?

About the Author ()

Tim Plaehn is the lead investment research analyst for income and dividend investing at Investors Alley. He is the editor for The Dividend Hunter, an investment advisory delivering income investments with double digit growth in share price and dividend payments, and 30 Day Dividends, a specialty income service that takes advantage of opportunities for relatively fast, attractive profits around potential dividend payouts.

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