This company reported very solid numbers but may be more off the radar for some investors. MPLX L.P. (NASDAQ: MPLX) is a diversified, growth-oriented MLP formed in 2012 by Marathon Petroleum to own, operate, develop and acquire midstream energy infrastructure assets. It is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids (NGLs); and the transportation and storage of crude oil and refined petroleum products.
The company made a very well timed and strategic purchase of MarkWest Energy last year for approximately $1.28 billion. The deal combined MarkWest, the second-largest processor of natural gas in the United States and largest processor and fractionator in the Marcellus and Utica shale plays, with MPLX.
RBC remains bullish on the company and said this in the research report:
MPLX can grow through capex spend via dropdowns $13–16 billion, organic $8.3 billion and synergistic growth $6–9 billion. We believe MPLX can deliver ~10% growth over the next three years.
MPLX unitholders are paid a very solid 6.66% distribution. The $46 RBC price target compares with the consensus target of $41.86. It traded on Tuesday at $35.60.
This top energy MLP has had a string of positives lately. Targa Resources Corp (NYSE: TRGP) is a leading provider of midstream services and is one of the largest independent midstream energy companies in North America. Targa owns, operates, acquires and develops a diversified portfolio of complementary midstream energy assets.
The company is primarily engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling NGLs and NGL products, including services to liquefied petroleum gas (LPG) exporters; gathering, storing and terminaling crude oil; storing, terminaling and selling refined petroleum products.
RBC has stayed bullish on this one too noted in the report:
Equity funding needs are addressed for 2017, and we believe current levels represent a good entry point. Most likely takeout candidate in MLP space in our view
Targa Resources investors are paid a very nice 8.82% distribution. The RBC price objective is a whopping $60. The consensus price target is lower at $53, and the stock traded recently at $41.00.
While it is important to remember that MLP distributions can contain return of capital, these top companies remain solid picks in the current low-yield environment, especially when you consider the underperformance of the MLP arena during 2017 and the solid prospects for the rest of the year and into 2018.