Energy Transfer investors finally received the long-anticipated distribution cut in late October, which was a stunning 50%. However, at $0.61 per unit, investors are still paid a stellar 9.38%.
BofA Securities has an $11 price target, while the posted consensus target is $10.26. Friday’s closing price for Energy Transfer stock was $6.50.
This company is the top holding for the Alerian MLP energy exchange-traded fund. MPLX L.P. (NYSE: MPLX) is primarily engaged in crude oil and refined products transportation and terminaling in the U.S. Midwest and Gulf Coast regions, as well as natural gas gathering and processing in the northeast from its prior acquisition of MarkWest Energy in 2015. MPLX was formed by independent U.S. refiner Marathon Petroleum.
Top analysts feel that the company’s proposed sale of its Javelina fractionation facility in Corpus Christi to Howard Energy Partners, a private midstream company, represents a “solid first step” in the company’s ongoing effort to divest noncore gathering and processing assets. MPLX intends to focus more on its Marcellus/Utica and Permian assets.
MPLX stock investors receive an 11.96% distribution. The $29 BofA Securities price target compares with a lower $26.25 consensus target and a Friday closing print of $23.00 a share.
Plains All American Pipeline
This remains a top MLP pick across Wall Street. Plains All American Pipeline L.P. (NYSE: PAA) is primarily engaged in midstream crude oil activities, including transportation, gathering, marketing and terminaling.
Top analysts, including the Goldman Sachs team, feel the company deserves a premium valuation given its leverage to the Permian and attractive organic growth backlog. The company owns an extensive network of pipeline transportation, terminaling, storage and gathering assets in key crude oil and NGL producing basins and transportation corridors and at major market hubs in the United States and Canada. On average, Plains All American handles more than 6 million barrels per day of crude oil and NGL in its Transportation segment.
Investors still receive a 7.91% distribution. BofA Securities has set a $13 price objective. The consensus figure is lower at $12.09, and Plains All American Pipeline ended last week at $9.10 per share.
It is important to remember that MLP distributions can contain a return of principal, and investors receive income information each year via K-1 documents. With that said, these are four of the very best companies in the industry, and they are great total return ideas for investors looking to initiate or add positions in the energy sector.