Energy Transfer Partners (MLP) at 11.6%
Energy Transfer Partners L.P. (NYSE: ETP) engages in the natural gas midstream and intrastate transportation and storage businesses in the United States, and investors receive an 11.6% distribution yield-equivalent. Trading at $18.63, it has a 52-week range of $17.85 to $29.76, which shows pressure on the $21 billion or so entity. As a reminder, 24/7 Wall St. observed that most MLP investors understandably became spooked about distributions after Plains All American cut its payout unexpectedly, and Energy transfer’s units are currently priced under when that unexpected distribution was announced.
The consensus analyst target price for this MLP is still close to $26, and the lowest analyst target of $23 just feels high considering this current investor climate.
FS Investment (BDC) at 10.0% … Maybe
FS Investment Corp. (NYSE: FSIC) is an alternative investment manager and claims to be the largest manager of BDCs, with over $20 billion in assets under management. Its BDC direct lending platform committed more than $1.1 billion in senior secured loans and other debt and equity financing to middle market companies in the second quarter of this year alone. While the current $0.22 dividend is well over the 10% yield threshold, FS Investment said in August that it plans to reduce that payout to $0.19 — but in 2018 it plans to have a special distribution that may make the payout higher.
At $8.10 a share, its market cap is right at $2 billion. The 52-week range is $7.95 to $10.80, and the stock has a $9.10 consensus target price.
Icahn Enterprises (Investment/MLP) at 11.0%
Icahn Enterprises L.P. (NASDAQ: IEP) has its existence tied to Wall Street legend Carl Icahn. This is his publicly traded investment arm that acts as an MLP but invests in passive and active holdings in automotive, energy, gaming, media, rail, mining, food, metals real estate and home décor. In short, Icahn and his team probably would invest in any company in which they can “make a buck or two.” This entity has been public since 1987, and at $54.25 a share it has a market cap of about $9 billion and a 52-week range of $45.42 to $64.80.
Icahn Enterprises pays a $1.50 quarterly distribution, the same since 2014, with a yield equivalent of over 11%. Jefferies recently put a $61 price target in Icahn Enterprises, but the consensus target price is just $50.00.
Kayne Anderson MLP (Closed-End Fund) at 11.2%
Kayne Anderson MLP Investment Co. (NYSE: KYN) is an oil and gas MLP closed end-fund with a market cap of just over $2 billion. It does have preferred shares for leverage, and it was last seen valued at a 3% premium to its net asset value. This has a distribution yield of 11.2% currently, and it is shown to have leverage of more than 40%. Trading at $17.91, this MLP closed-end fund has a 52-week range of $16.51 to $22.15.
Kayne Anderson MLP’s distribution was last seen at $0.45 per quarter, but that has slid from $0.55 previously. This payout used to be even higher than that before the oil meltdown.