The world of master limited partnerships (MLPs) is often considered complex, and it is sometimes considered controversial. That being said, investors have made massive sums of money on these vehicles in recent years. A new sector report on MLPs this week from BMO Capital Markets may seem a bit cautious because the underlying sector was started with only a Market Perform rating. What was interesting though is that once you get through the sector report, the two leaders — Kinder Morgan Inc. (NYSE: KMI) and Enterprise Products Partners L.P. (NYSE: EPD) — were actually given very positive Outperform ratings.

Enable Midstream Partners L.P. (NYSE: ENBL) and Spectra Energy Partners L.P. (NYSE: SEP) were also given Outperform ratings. The call on Kinder Morgan may not be an easy one to directly compare at the current time. After all, Richard Kinder is rolling up all the Kinder entities under Kinder Morgan, effectively doing away with the MLP structure that he helped make so prevalent over the past decade or so.

Danilo Juvane, Carl Kirst and Leah Jordan were the BMO analysts behind the MLP sector call. 24/7 Wall St. has included some very brief notes from their call, but we have also gone on to add in the consensus analyst target on each, as well as considering the distribution equivalent of a yield is. Our focus is on Enterprise and Kinder Morgan due to the dominant sizes.

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The BMO sector call covered nine select MLPs, four rated Outperform and five rated Market Perform. All in all, the team believes that MLPs will continue to benefit from strong energy fundamentals requiring significant infrastructure, but the admission is that MLPs are trading at historically high valuation multiples, reflecting the current low interest rate environment. Net fund inflows remain strong, but the team noted (as many others have as well) that fund flows are sensitive to interest rates.

Enterprise Products Partners L.P. (NYSE: EPD), the largest single MLP, was assigned an Outperform rating with a $45 per unit price target. The upside expectation is based on Enterprise’s structural advantages with a low cost of capital and a slimmer structure than most MLPs. BMO’s team also sees stable fee-based cash flows and a diverse asset platform and significant projects in various stages of development. Enterprise’s consensus price target is $41.83, versus a $40.75 current price, and its distribution “yield equivalent” is 3.8%.

Kinder Morgan Inc. (NYSE: KMI) was started as Outperform and given a price target of $47. This is now called a core holding, and the team said the restructuring provides an elegant solution to many of its challenges — slowing growth. This will emerge with more than $125 billion in enterprise value as the fourth-largest energy company in North America and a likely 10% dividend growth through 2020. Kinder Morgan’s current price of $38.40 compares to a consensus price target of $43.13, and its yield is 4.7%.

Enable Midstream Partners L.P. (NYSE: ENBL) was given an Outperform rating, along with a $29 per unit price target. Its current price is $26.12, its consensus price target is $27.18 and its distribution is right at 4.0%.

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Spectra Energy Partners L.P. (NYSE: SEP) was started with an Outperform rating and given a $62 per unit price objective. Spectra trades around $55.50 now, but we would point out that the consensus price target is down at $52.32. Its distribution is roughly 4.2%.

As a reminder, MLPs distributions are not 100% income. These are a combination of income and a return of capital, but screening systems and investors still think of these as “yields-equivalents” for a comparison to traditional stock dividends.

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