Not much is happening in the market today as volumes are low before a holiday shortened trading week. Not doing much trading myself today as I prep some dishes for Thanksgiving dinner tomorrow. The only trade I am making today is to add Boardwalk Pipeline Partners (NYSE:BWP) to my income portfolio. I like the energy infrastructure MLP space for yield and BWP provides a great distribution payout and solid growth prospects. It is also on sale after falling some 10% post-election.
Boardwalk Pipeline Partners, LP, owns and operates integrated natural gas pipelines and storage systems in the United States.
7 reasons BWP is a good value play at just over $25 a share:
- BWP yields 8.5% and has consistently and incrementally raised its distribution payouts over the last six years, even during the financial crisis.
- 95% of the company's revenue are not linked to commodity prices as it is paid a fixed fee for its services.
- Growth should accelerate next year to over 10% after posting around a 5% rise this year.
- The company has beaten four of the past five quarters and also provides a lower beta (.59) than the overall market.
- The shares just got upgraded from "Neutral" to "Outperform" by Credit Suisse.
- The 12 analysts that cover the shares have a median price target of $29 a share, implying a decent capital appreciation potential in addition to its high yield.
- The stock has good long term technical support at just under these levels (See Chart).
Disclosure: I am long BWP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.