Exterran Partners: A 9% Yielder For Income Investors

| About: Archrock Partners, (APLP)

Regular readers of my columns know by now that a good portion of my income portfolio consists of high yielding energy MLPs (Master Limited Partnerships) and LPs (Limited Partnerships). "Fracking" technology has unlocked a massive domestic energy production boom that still is in its infancy. These plays give a solid way to ride this secular wave. Exterran Partners (EXLP) recently popped onto my radar due to a solid earnings report and some other positive catalysts.

Recent positives for EXLP:

  • The company provided its latest earnings report and beat consensus on both the top and the bottom lines. Earnings of 31 cents a share beat expectations by an impressive 13 cents a share.
  • The company was just upgraded to "Buy" at TheStreet from "Hold" previously.
  • Exterran also just slightly raised its quarterly distribution payment in late January.
  • Credit Suisse provided positive comments on Exterran in January. The firm is also positive on the energy MLP space overall in 2013.

Exterran Partners, L.P. owns and operates a natural gas processing plant with a capacity of 10 million cubic feet per day and provides natural gas contract operations services to customers in the United States.

4 reasons EXLP is a solid income play at $22.50 a unit:

  1. EXLP yields nearly nine percent (8.9%) and has raised its payouts by more than 80% since going public in late 2006.
  2. Exterran grew revenues at better than a 25% rate in FY2012 and analysts see almost a 15% sales increase in FY2013.
  3. This is the third straight quarter the company has beat earnings estimates. It also has more than doubled operating cash flow since FY2010.
  4. The mean price target of the five analysts that cover the stock is just under $28 a share:

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in EXLP over the next 72 hours. 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.