The following list rank-orders pipeline limited partnerships from the ones with the highest annual yield to those with the lowest annual yield. Data is as of the market close on Sept. 4, 2009, before the long Labor Day weekend.
Linn Energy LLC. (LINE) – developer of oil and gas properties. Attractive 11.88 percent dividend yield.
Ferrellgas Partners LP (FGP) – distributor of propane and related equipment and supplies. Attractive 10.24 percent dividend yield.
Amerigas Partners LP (APU) – retail propane distributor play was. Attractive 9.71 percent dividend yield.
Teekay LNG Partners LP (TGP) – natural gas and crude oil shipping play. Attractive 9.69 percent dividend yield.
Inergy LP (NRGY) – seller, distributor, storage, marketing, trade, processing, and fractionation of propane, natural gas, and other natural gas liquids company. Attractive 9.59 percent dividend yield.
Duncan Energy Partners LP (DEP) – transporting, marketing, and storing natural gas company. Attractive 9.41 percent dividend yield.
Enbridge Energy Partners LP (EEP) – oil & gas pipeline play. Attractive 9.21 percent dividend yield.
Kinder Morgan Management LLC (KMR) – energy transportation and storage company. Attractive 8.89 percent dividend yield.
Teppco Partners LP (TPP) – petroleum pipeline play. Attractive 8.88 percent dividend yield.
Energy Transfer Partners LP (ETP) – natural gas midstream play. Attractive 8.70 percent dividend yield.
Enterprise Products Partners LP (EPD) – midstream energy oil and natural gas services play. Attractive 8.15 percent dividend yield.
Buckeye Partners Ltd. (BPL) – refined petroleum products play. Attractive 7.95 percent dividend yield.
Boardwalk Pipeline Partners (BWP) – natural gas transportation and storage play. Attractive 8.32 percent dividend yield.
NuStar Energy LP (NS) – storage and transportation of petroleum products. Attractive 8.00 percent dividend yield.
Kinder Morgan Energy Partners LP (KMP) – energy transportation and storage company. Attractive 7.97 percent dividend yield.
Suburban Propane LP (SPH) – distributor of propane, fuel oil, kerosene, diesel fuel, gasoline, and refined fuels. Attractive 7.97 percent dividend yield.
Energy Transfer Equity LP (ETE) – engages in natural gas midstream, transportation, and storage; and retail of propane. Attractive 7.86 percent dividend yield.
Magellan Midstream Partners (MMP) – engages in the transportation, storage, and distribution of refined petroleum products. Attractive 7.83 percent dividend yield.
Plains All American Pipeline LP (PAA) – oil and gas storage and transportation play. Attractive 7.55 percent dividend yield.
TC Pipelines LP (TCLP) – natural gas transportation. Attractive 7.51 percent dividend yield.
Sunoco Logistics Partners LP (SXL) – transport and storage of refined products and crude oil player. Attractive 7.42 percent dividend yield.
Western Gas Partners LP (WES) – midstream natural gas play. Attractive 7.31 percent dividend yield.
Enterprise GP Holdings LP (EPE) – midstream energy play. Attractive 7.23 percent dividend yield.
NuStar GP Holdings, LLC (NSH) – transportation and storage of petroleum products play. Attractive 7.20 percent dividend yield.
Inergy Holdings LP (NRGP) – retail and wholesale propane supply, marketing, and distribution company approaching 52-week highs. Attractive 7.12 percent dividend yield.
El Paso Partners Pipeline LP (EPB) – operator of natural gas transportation pipelines, storage, and other midstream assets. Attractive 6.74percent dividend yield.
Magellan Midstream Holdings LP (MGG) – petroleum products transport and storage play. Attractive 6.52 percent dividend yield.
AGL Resources (AGL) – natural gas play. Attractive 5.02 percent dividend yield.
Showing posts with label pipeline limited partnerships. Show all posts
Showing posts with label pipeline limited partnerships. Show all posts
Thursday, September 10, 2009
Sunday, March 22, 2009
Making money with LPs (Part 1): A different kind of partnership
The following six articles have been developed to introduce expanded coverage in Energy Pipeline News of the high-yield investments called master limited partnerships (MLPs) or simply limited partnerships (LPs). For further information, please visit http://www.energypipelinenews.com
LPs – limited partnerships - specialize in mineral and natural resource development that can be traded on securities exchanges. Investors buy and sell LP "units" just like shares of stock, but instead of receiving dividends, "unit holders" get cash distributions typical of a partnership structure.
Established by Congress in the 1980s, LPs were originally developed to spur investment in energy and natural resource projects. According to the Revenue Act of 1987, only companies engaged in "the exploration, production, mining, processing, refining, marketing or transportation" of mineral and natural resources may use this structure.
Today, there are about 100 LPs, more than 75 percent of which are energy infrastructure companies. These partnerships run a variety of businesses - including pipelines, refineries, processing plants and more - for a range of natural resources such as oil, coal, propane, natural gas, timber. They even cover alternative fuels like ethanol and biodiesel.
Because most LPs own physical assets that operate independently of the commodities transported, processed or refined, the income of these companies depends less on energy prices and more on energy demand. And since demand is much less volatile than pricing, LP income remains relatively stable even when energy prices go haywire. So unit holders usually see a steady, predictable increase in their cash distributions.
LPs – limited partnerships - specialize in mineral and natural resource development that can be traded on securities exchanges. Investors buy and sell LP "units" just like shares of stock, but instead of receiving dividends, "unit holders" get cash distributions typical of a partnership structure.
Established by Congress in the 1980s, LPs were originally developed to spur investment in energy and natural resource projects. According to the Revenue Act of 1987, only companies engaged in "the exploration, production, mining, processing, refining, marketing or transportation" of mineral and natural resources may use this structure.
Today, there are about 100 LPs, more than 75 percent of which are energy infrastructure companies. These partnerships run a variety of businesses - including pipelines, refineries, processing plants and more - for a range of natural resources such as oil, coal, propane, natural gas, timber. They even cover alternative fuels like ethanol and biodiesel.
Because most LPs own physical assets that operate independently of the commodities transported, processed or refined, the income of these companies depends less on energy prices and more on energy demand. And since demand is much less volatile than pricing, LP income remains relatively stable even when energy prices go haywire. So unit holders usually see a steady, predictable increase in their cash distributions.
Making money in pipeline LPs (Part 3): tax consequences
Because LPs are partnerships and not corporations, their income is pass-through, which means it's not subject to "double taxation" from corporate income tax. Therefore, more cash is available for unit holder distributions (which, by law, must consist of the company's entire cash flow after operational, maintenance and debt expenditures are met).
What's more, due to the way limited partnerships work, as much as 90 percent of those taxes are deferred until the unit is sold - a nice perk for investors thinking long term.
But LPs also have their tax drawbacks. For institutional investors, they're an administrative headache, and even individual investors may run into some paperwork-related problems. Dividends paid by LPs held in IRA’s are taxable, unlike common stock dividends paid into the IRAs. In some cases, even state taxes on dividends paid to LP unit holders may be taxed. Holding LPs in an IRA or other tax-deferred account could potentially set off an obscure tax known as the unrelated business taxable income, which is why some funds, such as endowments, avoid MLPs altogether.
What's more, due to the way limited partnerships work, as much as 90 percent of those taxes are deferred until the unit is sold - a nice perk for investors thinking long term.
But LPs also have their tax drawbacks. For institutional investors, they're an administrative headache, and even individual investors may run into some paperwork-related problems. Dividends paid by LPs held in IRA’s are taxable, unlike common stock dividends paid into the IRAs. In some cases, even state taxes on dividends paid to LP unit holders may be taxed. Holding LPs in an IRA or other tax-deferred account could potentially set off an obscure tax known as the unrelated business taxable income, which is why some funds, such as endowments, avoid MLPs altogether.
Making money in pipeline LPs (Part 4): Capital losses
Like almost all other asset classes, LP unit prices nose-dived in 2008. The Alerian MLP Index, the sector's benchmark, lost 41.5 percent of its value last year, and as of March 2, 2009, it was 48 percent below its peak.
In part, MLPs suffered so greatly because of the credit squeeze. Since MLPs pay out most of their profits in unit holder distributions, they must rely heavily on loans to finance any growth initiatives. When lenders pulled back, the companies ran into cash shortages.
Mutual and pension funds that were heavily invested in the LPs, when they faced cash calls from clients who wanted to get out of the tanking stock market, sold off many of the LPs in order to raise cash to meet cash call demands, That helped to drive down their prices.
In addition, hedge funds that had loaded up on LPs in good times, dumped them as the market tanked. Due to the administrative and tax obstacles mentioned above, institutional investors were largely prevented from scooping them up.
But LP fundamentals remain strong.
In part, MLPs suffered so greatly because of the credit squeeze. Since MLPs pay out most of their profits in unit holder distributions, they must rely heavily on loans to finance any growth initiatives. When lenders pulled back, the companies ran into cash shortages.
Mutual and pension funds that were heavily invested in the LPs, when they faced cash calls from clients who wanted to get out of the tanking stock market, sold off many of the LPs in order to raise cash to meet cash call demands, That helped to drive down their prices.
In addition, hedge funds that had loaded up on LPs in good times, dumped them as the market tanked. Due to the administrative and tax obstacles mentioned above, institutional investors were largely prevented from scooping them up.
But LP fundamentals remain strong.
Wednesday, January 7, 2009
Pipeline limited partnerships rebound sharply following selloff
Shares of pipeline operators plunged in the waning months of 2008, but have rebounded sharply in the first few days of 2009.
Atlas Pipeline Partners, for example, rebounded from $5.20 a share at yearend 2008 to $10.25 at end of day Jan. 6, up almost 100 percent, and was paying a $3.84 annual dividend. Eagle Rock Energy Partners, paying $1.64, jumped from $4.50 a share to $8.02. Enbridge Energy Partners, paying $3.96, jumped from $24.03 to $30.20. Plains All American, paying $3.57, ran from $32.00 to $38.98. Williams Partners LP, paying $2.54, jumped from $$11.50 to $16.34. And Buckeye Partners, paying $3.50, ran from $30.25 to $36.80.
In 2008, companies such as Enterprise Products Partners and El Paso Corp. have struggled with falling share prices, tight credit markets and a shifting mix of shareholders that has eroded their stock prices.
Enterprise fell almost 35 percent last year, while Kinder Morgan Energy Partners dropped 15 percent and El Paso plunged 55 percent. The declining shares led to El Paso’s removal from the Standard & Poor’s 100 Index.
Atlas Pipeline Partners, for example, rebounded from $5.20 a share at yearend 2008 to $10.25 at end of day Jan. 6, up almost 100 percent, and was paying a $3.84 annual dividend. Eagle Rock Energy Partners, paying $1.64, jumped from $4.50 a share to $8.02. Enbridge Energy Partners, paying $3.96, jumped from $24.03 to $30.20. Plains All American, paying $3.57, ran from $32.00 to $38.98. Williams Partners LP, paying $2.54, jumped from $$11.50 to $16.34. And Buckeye Partners, paying $3.50, ran from $30.25 to $36.80.
In 2008, companies such as Enterprise Products Partners and El Paso Corp. have struggled with falling share prices, tight credit markets and a shifting mix of shareholders that has eroded their stock prices.
Enterprise fell almost 35 percent last year, while Kinder Morgan Energy Partners dropped 15 percent and El Paso plunged 55 percent. The declining shares led to El Paso’s removal from the Standard & Poor’s 100 Index.
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