4 Top Energy MLPs That Recently Raised Their Payout Distributions

Energy

Published: April 20, 2016 9:45 am

Last Updated: January 13, 2020 10:34 am

One reason that investors who look for income have long cherished energy master limited partnerships (MLPs) is that not only do they pay solid and sometimes large quarterly distributions, but the top companies also consistently raise those distributions. With the price of oil up solidly since the lows posted earlier this year, the sector has turned up nicely for investors, and the darkest days appear to be over.

In a recent research note from Kristina Kazarian and her outstanding team at Deutsche Bank, four top MLPs that recently raised the distributions paid to shareholders are highlighted. The positives behind companies that do increase payouts are numerous, but clearly it shows consistent and perhaps improving cash flow.

Antero Midstream

This top company posted a serious increase for its shareholders. Antero Midstream Partners L.P. (NYSE: AM) owns, operates and develops midstream energy assets. Its assets include 8-inch, 12-inch, 16-inch and 20-inch high and low pressure gathering pipelines and compressor stations that collect natural gas and oil and condensate from wells in the Marcellus Shale in West Virginia and the Utica Shale in Ohio, as well as water handling and treatment assets.

As of December 31, 2015, the company’s Marcellus and Utica Shale gathering systems comprised 182 miles and 110 miles of pipelines, and the water handling systems include 184 miles and 75 miles of pipelines.

The company increased the distribution to shareholders to $0.235 per share, payable quarterly. That is a 31% increase compared to 2015 and a 7% increase sequentially. Based on current pricing, Antero Midstream investors are now paid a 3.98% distribution.

The Thomson/First Call consensus price target for the stock is $28.65. The shares closed Tuesday at $23.61, up over 6% on the day.