Energy Business

5 MLPs With Huge Dividends to Buy Now as Oil Surges Higher on OPEC Deal

Oil was absolutely hammered in November, with the price of West Texas Intermediate crude dropping a stunning 20% in just over a month’s time. After that massive drop, investors have seen a huge reversal of the black gold, and the Organization of the Petroleum Exporting Countries (OPEC) stated Wednesday that it would stay with an output increase of 400,000 barrels per day. In addition, the cartel’s technical committee cut estimates for a surplus in the first quarter, citing little evidence of Omicron affecting demand going forward.

The good news for investors is that the top energy master limited partnerships (MLPs) offer a safer way to play the sector. They pay out some sizable distributions and still offer investors some attractive entry points.

We screened our 24/7 Wall St. energy research database looking for the highest yielding energy MLPs that also have Hold or Buy ratings from major Wall Street firms, and found five that look extremely appealing now, especially for frustrated income investors who have a higher risk tolerance. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Antero Midstream

With shares trading under $10 apiece, this very well-run company offers a huge total return package. Antero Midstream Corp. (NYSE: AM) owns, operates and develops midstream energy infrastructure. It operates through two segments.

The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collects and processes production from Antero Resources’ wells in West Virginia and Ohio.

The Water Handling segment delivers fresh water and offers other fluid handling services, such as wastewater transportation, disposal and treatment, as well as high-rate transfer services.

Antero Midstream stock investors receive a giant 9.01% distribution. Wells Fargo has an Equal Weight rating and recently lifted its $10 target price to $12. The analysts’ consensus target is just $8.94, but the shares ended Monday trading at $9.94 apiece.

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