The Enterprise Products Partners distributions have grown consistently over the years, and last year it announced that the board of directors of its general partner declared an increase in the quarterly cash distribution paid to partners to $0.45 per common unit, or $1.80 per unit on an annualized basis.
Investors receive an 8.23% distribution. BofA Securities has a $32 price target, and the consensus target is $28.17. Shares closed at $21.88 on Wednesday.
This is the top holding for the ALPS Alerian MLP ETF (NYSEARCA: AMLP). 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.
MPLX is one of the bigger pipeline entities, with a market capitalization of nearly $30 billion, and the company repurchased a strong $155 million in units during the second quarter. The partnership currently has approximately $657 million remaining under its board authorization and that kind of buying by management tends to keep a bid under the stock price.
Investors receive a 9.57% distribution. The $36 BofA Securities price target compares with the $32.88 consensus figure and Wednesday’s closing print of $28.75.
Western Gas Partners
This is a defensive play with a great balance sheet and limited commodity price risk. Western Midstream Partners L.P. (NYSE: WES) is a growth-oriented master limited partnership formed by Anadarko Petroleum to acquire, own, develop and operate midstream energy assets.
Western Gas Partners has midstream assets located in the Rocky Mountains, the Mid-Continent, north-central Pennsylvania and Texas. The company is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, NGLs and crude oil for Anadarko, as well as for other producers and customers.
Investors receive a 6.04% distribution. The BofA Securities $25 price target is the same as the consensus target. Wednesday’s close was at $21.11 a share.
These four top companies offer reasonably safe and reliable distributions, plus they are major players in the energy infrastructure arena. Investors looking for solid total return potential can do well owning these MLP leaders. Remember, though, that MLP distributions may contain return of principal. Those looking to avoid the pesky K-1s can always purchase shares in the ALPS Alerian MLP ETF. Investors receive a 1099 instead of a K-1.
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