Golar LNG Partners
This liquefied natural gas (LNG) shipping and storage play holds a big distribution for shareholders and is the top pick across Wall Street. Golar LNG Partners L.P. (NASDAQ: GMLP) owns and operates floating storage regasification units (FSRUs) and 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 second-quarter results and also was successful in lowering leverage.
Golar LNG Partners has a diverse pipeline that includes its FLNG projects and, as a result, some Wall Street analysts feel the company has the largest growth potential over its peer group, with potential drop-downs/newbuilding inventories of 16 vessels.
Shareholders are paid a generous 11.82% distribution. Merrill Lynch has set its price target at $26. The posted consensus target is $23.43, and the shares were last seen trading at $19.54 apiece.
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.
The company made two gigantic sales recently that were huge wins for shareholders. Icahn Enterprises sold most of its Tropicana Entertainment casinos and operations to Gaming and Leisure Properties for $1.21 billion. The deal did not include the Aruba or Caribbean properties, which will be sold later for $1.85 billion.
The company is also is selling car-parts maker Federal-Mogul that it has controlled since 2008 for about $2.44 billion to Tenneco, shaving off a piece of an auto empire that includes holdings in rental services, ride hailing and repair shops.
Investors in Icahn Enterprises are paid a massive 10.87% distribution. The $61 Jefferies price target is well above the $50 analyst consensus target. The shares closed most recently at $64.42.
This company has hit our insider buying screens numerous times over the past two years. Summit Midstream Partners L.P. (NYSE: SMLP) focuses on owning, developing and operating midstream energy infrastructure assets primarily shale formations, in North America. The company provides natural gas gathering, treating and processing services pursuant to primarily long-term and fee-based gathering and processing agreements with customers and counterparties in five unconventional resource basins.
Since going public in 2012, the company has continued increasing its distribution as the result of a number of acquisitions and investments that grew its footprint across most of the major shale plays. The company recently guided 2018 in line with expectations, and it should be another year of smooth growth and consistent distributions.
Summit investors are paid a huge 14.98% distribution. The Baird price target is $22. The consensus target is listed at $19.33, and the stock closed trading on Monday at $15.35 per share.
It is important to remember two things. Most of these companies are limited partnerships, and so distributions can include the return of principal. Secondly, these are all very aggressive growth and income plays and are only suitable for the accounts with high risk tolerance.