Energy Business

4 Top Energy MLPs That Recently Raised Their Payout Distributions

Genesis Energy

This is another top company that has fought its way through the sector trouble. Genesis Energy L.P. (NYSE: GEL) operates in the midstream segment of the oil and gas industry in the Gulf Coast region of the United States.

Its Onshore Pipeline Transportation segment transports crude oil and carbon dioxide (CO2). This segment owns four onshore crude oil pipeline systems with approximately 500 miles of pipe located primarily in Alabama, Florida, Louisiana, Mississippi and Texas, as well as CO2 pipelines with approximately 270 miles of pipe. The company’s Offshore Pipeline Transportation segment transports crude oil and owns various offshore crude oil pipeline systems with approximately 1,200 miles of pipe located offshore in the Gulf of Mexico.

Genesis recently announced that it will pay a regular quarterly distribution of $0.6725 per common unit for the quarter ended March 31, 2016. The distribution will be paid on May 13, 2016, to common unitholders of record at the close of business on April 29, 2016. This distribution represents an increase of approximately 10.2% over the first quarter 2015 quarterly distribution of $0.61 per unit, and an approximate 2.7% increase over the distribution paid with respect to the fourth quarter of 2015.

Genesis shareholders are now paid an outstanding 8.02% distribution. The consensus price objective is $38.17. The stock closed Tuesday at $33.53 per share.

Tallgrass Energy Partners

This rounds out the four picks, and it also offers investors a solid and well-covered distribution. Tallgrass Energy Partners L.P. (NYSE: TEP) provides crude oil transportation to customers in Wyoming, Colorado and the surrounding regions through Pony Express, which owns the Pony Express System, a crude oil pipeline commencing in Guernsey, Wyo., and terminating in Cushing, Okla., and includes a lateral in northeast Colorado that commences in Weld County and interconnects with the pipeline just east of Sterling.

In addition, the company provides natural gas transportation and storage services for customers in the Rocky Mountain and Midwest regions of the United States through the Tallgrass Interstate Gas Transmission system, a FERC-regulated natural gas transportation and storage system located in Colorado, Kansas, Missouri, Nebraska and Wyoming, and the Trailblazer Pipeline system, a FERC-regulated natural gas pipeline system extending from the Colorado and Wyoming border to Beatrice, Nebr.

The company recently declared a quarterly cash distribution of $0.705 per common unit for the first quarter of 2016, or $2.82 on an annualized basis. This represents a 35.6% increase from the first quarter 2015 distribution of $0.52 per common unit and a 10.2% sequential increase from the fourth quarter 2015 distribution of $0.64 per common unit. It is the company’s 11th consecutive increase since its initial public offering in May 2013.

Tallgrass investors are now paid a stellar 7.21% distribution. The consensus price target stands at $45.07. The shares closed Tuesday at $39.09 apiece.

All four of these top stocks make good sense for investors looking to play a second half 2016 and 2017 sector rebound. Should oil languish in the recent trading range, they should still offer stability, as well as increases in the distributions. It is important to remember that MLP distributions may include return of capital.

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