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:
- EXLP yields nearly nine percent (8.9%) and has raised its payouts by more than 80% since going public in late 2006.
- Exterran grew revenues at better than a 25% rate in FY2012 and analysts see almost a 15% sales increase in FY2013.
- This is the third straight quarter the company has beat earnings estimates. It also has more than doubled operating cash flow since FY2010.
- 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.