Golar LNG Partners
This is a shipping and storage play that holds a big distribution for shareholders and is a top pick across Wall Street. Golar LNG Partners L.P. (NASDAQ: GMLP) owns and operates floating storage regasification units (FSRUs) and liquefied natural gas (LNG) carriers under long-term charters in Brazil, the United Arab Emirates, Indonesia and Kuwait. The company also engages in the leasing of its fleets.
The Marshall Islands–based company has a fleet of six FSRUs and five LNG carriers, a combined average remaining useful life of 25 years, and an average remaining charter duration of five-plus years. The company posted solid third-quarter results and also was successful in lowering leverage.
The company has a diverse pipeline that includes Golar’s FLNG projects and as a result, some Wall Street analysts feel it has the largest growth potential in its peer group, with potential drop-downs/newbuilding inventories of 16 vessels.
Shareholders receive a $10.56% distribution. Merrill Lynch has set its price target at $25. The consensus target is $23.20, and shares traded at $22.00.
Icahn Enterprises L.P. (NYSE: IEP) is Wall Street legend Carl Icahn’s publicly traded investment vehicle, a combination activist hedge fund and a diversified holding company. The current portfolio holdings span energy, automotive, real estate and a host of smaller investments across other industries.
All investments made by Icahn are conducted through IEP, and IEP primarily executes its investment strategy through the hedge fund, focusing mostly on the equity markets. The company was originally formed in 1987 as an MLP, and Icahn continues to control the company, owning over 90% of IEP’s outstanding shares.
Jefferies analysts like the company and said this in an August report:
Icahn Enterprises reported adjusted EBITDA of +$506 million in the second quarter, up from +$412 million in the first quarter. Positive performance at the hedge fund (+4.3% return vs. -2.7% last quarter) was the primary quarter over quarter difference. The company’s net asset value of approx. $37.50/unit was down approx. $1/unit as growth was offset by share dilution.
Investors are paid a 11.32% distribution. The Jefferies price target is at $61. The consensus target is $50, and shares were last seen at $53.10.
These five companies pay massive distributions or dividends and have upside potential. It should be noted that limited partnerships often include return of capital in their distributions. Again, these are only suitable for aggressive accounts, but they could be great vehicles for those seeking income and some growth.