MarkWest Energy Partners
This is a solid MLP to buy and recently has seen buyout chatter around Wall Street. MarkWest Energy Partners L.P. (NYSE: MWE) owns and operates midstream services related businesses. It has a leading presence in many natural gas resource plays, including the Marcellus, Utica, Huron/Berea, Haynesville, Woodford and Granite Wash formations, where it provides midstream services to its producer customers.
The company reported lower-than-expected first-quarter 2015 results due to lower natural gas liquid (NGL) sales volumes in the Gulf Coast and fractionated volumes in the Northeast region. The negatives are partially offset by increased natural gas gathering and processing volumes in the Marcellus area.
The Deutsche Bank team acknowledges commodity pricing and equity issuance could pressure the company near term, but they also point out that the company has outstanding interconnectivity to takeaway capacity, very solid regional expertise and strong producer relationships. They, like others, think the stock is a buyout candidate as well.
MarkWest unitholders are paid a 6.68% distribution. The Deutsche Bank price objective is $76, and the consensus target is $74.71. Shares closed Monday at $55.06.
This company reported very solid second-quarter numbers and may be more off the radar for some investors. MPLX L.P. (NASDAQ: MPLX) is a growth-oriented MLP formed in 2012 by Marathon Petroleum to own, operate, develop and acquire pipelines and other midstream assets related to the transportation and storage of crude oil, refined products and other hydrocarbon-based products. MPLX’s assets consist of a 99.5% equity interest in a network of common carrier crude oil and products pipeline assets located in the Midwest and Gulf Coast regions of the United States and a 100% interest in a butane storage cavern located in West Virginia, with approximately 1 million barrels of natural gas liquids storage capacity.
MPLX owns and operates a network of pipeline systems that include approximately 1,004 miles of common carrier crude oil pipelines and approximately 1,902 miles of common carrier product pipelines in nine states. In late July, the company declared a distribution of $0.44 per common unit. This represents an increase of $0.03 per unit, or 7.3%, over the first-quarter 2015 distribution and an increase of $0.0975 per unit, or 28.5%, over the second-quarter 2014 distribution.
MPLX unitholders are paid a 3.64% distribution. While the Deutsche Bank price target is $67, the consensus target is higher at $68.75. Shares closed most recently at $48.31.
While the devastation in the sector will not be healed quickly, shopping around for quality companies like these makes good sense now. The distributions looked solid for the time being, and when the market does trade higher, they should tend to rebound faster.