S&P maintains ‘Buy’ opinion on units of Buckeye Partners

S&P has reduced its 2012 earnings per unit estimate for Buckeye Partners to $3.49 from $3.75 based on lower revenues at its natural gas storage segment due to low gas prices, and a higher share count.

S&P kept its 2013 estimate of $3.99. It sees BPL gaining from its pending acquisition of Chevron's New York Harbor marine terminal as it should help position BPL to meet Northeast refining supply challenges. S&P kept its target price at $75, based on a target yield of 5.7percent on its forward projected distribution, in line with peers.

11 large-cap MLP stocks for dividend lovers

For many investors, publicly traded master limited partnerships (MLPs) can be valuable tools for income. As partnerships, MLPs are subject to a special tax code and avoid federal and state corporate income taxes. Their distributions to investors are partially or entirely tax-deferred.

Most MLPs are high yield investments and increase their distributions to investors each quarter, achieving a consistent dividend growth for years. However, investing in MLPs can be tricky due to the disadvantages of holding them in tax-deferred accounts. Investors should consult with their tax advisors before adding MLPs to their portfolios.

The market data for stocks listed below are sourced from Fidelity and data is as of Aug. 26, 2011. All companies on the list have a 12-month dividend yield of at least five percent. The stocks also have market capitalizations above $3 billion and positive average dividend growth over the past five years. The average dividend yield of these 11 stocks is 7.00 percent, while their five-year average dividend growth is 6.29 percent on average.

Boardwalk Pipeline Partners (NYSE: BWP) is a U.S. energy partnership that provides natural gas transportation and storage services in the United States. BWP lost -17.68 percent since the beginning of this year and the stock now has an 8.59 percent dividend yield. In the past five years, BWP increased its dividend payments by 6.68 percent annually. The stock recently traded at $24.56 and has a market cap of $4.84 billion. Jim Simons and Chuck Royce are prominent BWP investors.

Energy Transfer Partners (NYSE: ETP) is a limited partnership that operates in the natural gas transportation business in the United States. ETP lost -8.24 percent year-to-date and the stock now has a 8.24 percent dividend yield. In the past five years, ETP increased its dividend payments by 6.99 percent annually. The stock recently traded at $43.36 and has a market cap of $9.06 billion. Jim Simons holds the largest ETP position.

Enbridge Energy Partners (NYSE: EEP) is a U.S. energy partnership providing crude oil, liquid petroleum and natural gas transportation and storage services in the United States. EEP lost -7.85 percent since the beginning of this year and it has a 7.59 percent dividend yield. In the past five years, EEP increased its dividend payments by 2.86 percent annually. The stock recently traded at $27.34 and has a market cap of $7.17 billion.

NuStar Energy (NYSE: NS) is a U.S. partnership that operates petroleum terminals and provides petroleum transportation services. NS lost -13.11 percent in 2011 and the stock now has a high dividend yield of 7.53 percent. In the past five years, NS increased its dividend payments by 4.35 percent annually. The stock recently traded at $57.40 and has a market cap of $3.62 billion.

Kinder Morgan Energy Partners (NYSE: KMP) is a U.S. energy partnership providing energy products transportation and storage services. KMP has a 6.68 percent dividend yield and returned 1.13 percent since the beginning of this year. In the past five years, KMP increased its dividend payments by 7.26 percent annually. The stock recently traded at $67.82 and has a market cap of $22.38 billion.

Buckeye Partners (NYSE: BPL) is a U.S. energy partnership that distributes petroleum in the United States. BPL lost -5.12 percent since the beginning of this year and it now has a 6.58 percent dividend. In the past five years, BPL increased its dividend payments by 5.84 percent annually. The stock recently traded at $60.45 and has a market cap of $5.55 billion. John Phelan's MSD Capital and Michael Messner’s Seminole Capital are the most prominent BPL investors.

Plains All American Pipeline (NYSE: PAA) is a limited partnership that provides energy products transportation, storage and marketing services in the United States and Canada. PAA has a 6.50 percent dividend yield but lost -1.08 percent since the beginning of this year. In the past five years, PAA increased its dividend payments by 6.27 percent annually. The stock recently traded at $59.36 and has a market cap of $8.78 billion.

Markwest Energy Partners (NYSE: MWE) is a U.S. partnership that provides natural gas transportation and processing services in the United States. MWE has a 6.03 percent dividend yield and gained 6.32 percent since the beginning of this year. In the past five years, MWE increased its dividend payments by 8.76 percent annually. The stock recently traded at $44.10 and has a market cap of $3.45 billion.

Enterprise Product Partners (NYSE: EPD) is a U.S. partnership that distributes natural gas and crude oil in the United States, Canada and the Gulf of Mexico. EPD has a 5.89 percent dividend yield and returned 1.05 percent year-to-date. In the past five years, EPD increased its dividend payments by 5.98 percent annually. The stock recently traded at $40.34 and has a market cap of $33.78 billion.

Williams Partners (NYSE: WPZ) is an American energy partnership that engages in natural gas exploration, processing, storage and transportation. WPZ has a 5.46 percent dividend yield and gained 16.15 percent since the beginning of this year. In the past five years, WPZ raised its dividend payments by 11.50 percent annually. The stock recently traded at $52.00 and has a market cap of $15.03 billion.

Magellan Midstream Partners (NYSE: MMP) is a U.S. partnership that provides transportation and storage services for refined petroleum products. MMP has a 5.29 percent dividend yield and returned 6.50 percent since the beginning of this year. In the past five years, MMP increased its dividend payments by 6.33 percent annually. The stock recently traded at $57.81 and has a market cap of $6.45 billion.

Buckeye Partners LP continues price slide with new unit float

ATLANTA, Ga. (April 15, 2011) - Buckeye Partners LP (NYSE: BPL) has been underperforming the pipeline limited partnership market for months, and disappointment hit the tipping point on April 14 when disgruntled unitholders dumped more than 6.1 million units, driving down the long-flagging unit price of BPL securities.

According to “Energy Pipeline News,” a daily newsletter that covers the pipeline master limited partnership market, the disappointment in the security’s performance culminated when Buckeye announced the offering of at least 4.8 million new limited partnership units priced at a 3.3 percent discount to BPL’s April 13 closing price.
Existing units fell 2.7 percent to $59.75 in premarket trading on April 14. By the market close, Buckeye units were at $60.35, down $1.06 (1.73 percent) after hitting an intraday low of $59.89. Much of the dumping of 6.1 million units occurred during the final minutes of trading. The final-minutes selloff was attributed to programmed trading.

Through April 13’s close, Buckeye units were down 8.1 percent this year.

The new units were priced at $59.41 each. The underwriters have been granted an option to purchase up to 720,000 additional LP Units.

Barclays Capital, Citi, J.P. Morgan, Morgan Stanley and Wells Fargo Securities are acting as joint book-running managers of the new BPL unit offering. Deutsche Bank Securities and Credit Suisse are acting as the co-managers of the LP unit offering.

The operator of petroleum products transmission, gas storage and fuel distribution businesses plans said it planned to use the proceeds from the new float to reduce the indebtedness outstanding under its revolving credit facility.

The offering is expected to increase the number of units outstanding by about six percent. The company also sold units in January.
Buckeye Partners, which has expanded greatly through acquisitions in recent months, in February reported that its fourth-quarter profit fell by half as effects of the expansion masked rising revenue across most of its businesses.

BPL closed its merger with sister company Buckeye GP Holdings LP and acquired a marine terminal in Puerto Rico late last year. In January, it acquired an 80 percent interest in Bahamas Oil Refining Co. and agreed to pick up the remaining stake in a deal valuing the target at $1.7 billion. Last month, it agreed to acquire refined petroleum products terminals and pipeline assets for $225 million from BP PLC.

BPL is included in the three model portfolios run by “Energy Pipeline News.” The three portfolios had returns in 2010 of 28.9 percent, 29.1 percent and 74.8 percent respectively. The 74.8 percent return was in the leveraged model portfolio.