Bond and Stock Surprise: Many MLPs Hitting New All-Time Highs

May 21, 2014 by Jon C. Ogg

The world of master limited partnerships (MLPs) was being targeted by many critics earlier in the year. Suddenly, a firm oil market and a falling interest rate environment drove up most sectors that offer higher dividends. What is amazing is that a handful of these was hitting all-time highs on Wednesday, and the other amazing part was that the ones hitting all-time highs were all valued well into the billions of dollars.

While MLP payouts are considered distributions rather than dividends, meaning part a return of capital and part income rather than just income, investors still frequently refer to the “yields” available in MLPs. We have represented these “yields” as yield equivalents to simplify the process.

Also included was the price action of each MLP, as well as what the new all-time high was. We included the consensus price targets per unit from Wall Street analysts and the implied market capitalization rates on each.

Access Midstream Partners L.P. (NYSE: ACMP) was trading at $60.31 right before the close, and the all-time high hit today was $60.59. The consensus price target from analysts was $65.29 and the implied yield is 3.9%. Access is worth close to $11.5 billion in market value.

Equity Midstream Partners L.P. (NYSE: EQM) was up $0.63 at $78.70 late on Wednesday, against an all-time high hit on the day of $78.73. The consensus analyst target is $81.42 and its yield equivalent is 2.5%. Equity Midstream’s market cap is $3.8 billion.

Magellan Midstream Partners L.P. (NYSE: MMP) was up $0.21 late on Wednesday at $79.97. Its high on the day was up at $80.49. Magellan’s market cap is $18 billion. The MLP has a consensus price target from analysts of $81.68 and its yield equivalent is 3.1%.

Targa Resources Partners L.P. (NYSE: NGLS) was up $0.75 at $66.15 late on Wednesday, and its high on the day was $66.26. Targa’s market cap is above $7.5 billion. Be advised that the consensus price target from analysts is lower at 463.06, although its yield equivalent is 4.8%.

Western Gas Partners L.P. (NYSE: WES) was up $0.11 at $71.67 in late trading on Wednesday. Its high on the day was $72.17, and its market cap is almost $8.5 billion. The consensus price target for Western Gas Partners is $71.57, and its yield equivalent is 3.5%.

While not quite at all-time highs, Ferrellgas Partners L.P. (NYSE: FGP) was up nine cents to $26.54 late in the day and it hit a 52-week high of $26.62 on Wednesday. Be advised that this has a lower market cap at $2.1 billion, and its consensus price target is down all the way at $20.20. Ferrellgas shows to have an implied yield equivalent of about 7.5%.

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