Four Big MLPs Immune to Current MLP Sector Concerns

Print Email

The world of master limited partnerships, or MLPs, has been suffering under concerns of late. There is at least some worry that those high payouts that investors generally consider as dividend yields could come under at least some pressure after what was seen with Boardwalk Pipeline Partners L.P. (NYSE: BWP). And then there was the valuation concern brought up by Barron’s against Kinder Morgan Energy Partners L.P. (NYSE: KMP).

It turns out that there are many different sorts of MLPs out there. Many are doing incredibly well, and some of them are among the industry’s largest MLPs. 24/7 Wall St. wanted to highlight five big MLPs which are not falling. These are the ones which seem, at least currently, immune to the woes of some MLP investors.

These trade as shares on the exchange, but they are, in fact, units. The yields are technically distributions because they are a combination of income and return of capital rather than true dividends. While these were generally lower on Friday, many investors were likely just worried that another Barron’s bash might come. That did not come to pass.

We have evaluated their performance, where the Thomson Reuters consensus price target is, what their distribution “yields” are, and more. To make the screen here, each MLP could have any “yield,” but their market caps had to be above the $1 billion mark and had to be with 5% of their 52-week highs. In fact, three of the four we chose to feature are actually all above $10 billion in market cap.

Buckeye Partners L.P. (NYSE: BPL) may have closed down almost 1% at $73.23 on Friday, but this MLP is down only 3.4% from the 52-week high of $75.83. Its distribution yield is also 5.8%, and it has a market cap of $8.4 billion. The consensus price target is up at $76.60.

Buckeye provides mid-stream energy logistics services. It owns and operates one of the nation’s largest independent petroleum products common carrier pipeline networks providing refiners, wholesalers, marketers, airlines, railroads and other commercial end-users with dependable, all-weather transportation of refined petroleum products.

Enterprise Products Partners L.P. (NYSE: EPD) is the king of MLPs; it has a $61.8 billion market value. Even with a 0.6% drop to $67.11 on Friday, this is down only 1.5% from its 52-week high of $68.10. Enterprise has a lower “yield” than most other MLPs at 4.3%, but it is also considered to be among the best and safest to many investors. Analysts have a consensus price target of $72.10 on Enterprise. The MLP has the following segments:

  • Pipelines: 50,000 miles of natural gas, NGL crude oil, refined products and petrochemical pipelines.
  • Storage (Salt Dome): 200 million barrels (MMBbls) of NGL, refined products and crude oil storage capacity 14 billion cubic feet (Bcf) of natural gas storage capacity.
  • Natural Gas Processing: 24 natural gas processing plants.
  • Marine Services: 64 tow boats and 131 barges.
  • Platforms: 6 offshore hub platforms.
  • NGL Import/Export Terminals in the Houston Ship Channel.

Energy Transfer Equity L.P. (NYSE: ETE) fell almost 0.5% to $43.65, but this is still down by just under 2% from its 52-week high of $44.53. The distribution yield here is 3.2%, and the consensus analyst price target is up at $48.14. Energy Transfer has a $24 billion market cap.

Energy Transfer Equity L.P. owns the general partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners L.P. (NYSE: ETP), approximately 30.8 million ETP common units, and approximately 50.2 million ETP Class H Units, which track 50% of the underlying economics of the general partner interest and IDRs of Sunoco Logistics Partners L.P. (NYSE: SXL). ETE also owns the general partner and 100% of the IDRs of Regency Energy Partners L.P. (NYSE: RGP) and approximately 26.3 million RGP common units. The Energy Transfer family of companies owns more than 56,000 miles of natural gas, natural gas liquids, refined products and crude oil pipelines.

Magellan Midstream Partners L.P. (NYSE: MMP) closed down 0.8% at $67.67 on Friday, but that is down 4.6% from its 52-week high of $70.99. Magellan has a market cap of some $15.3 billion, and its distribution yield is only 3.4%. This MLP is one that has the chart you wish you bought into a decade ago – starts low on the left and rises year after year as you look to the right. Thomson Reuters has a consensus price target of $71.43.

Magellan Midstream owns the longest refined petroleum products pipeline system in the country. It claims to be able to tap into nearly 50% of the nation’s refining capacity and store more than 90 million barrels of petroleum products such as gasoline, diesel fuel and crude oil. Its investors benefit from our primarily fee-based business, low-risk growth projects and attractive quarterly cash distributions.

RSS Facebook Twitter