Today, we are initiating coverage on Rose Rock Midstream (NYSE:RRMS). This midstream MLP is a great value play with a high dividend as well as strong growth potential through a drop down model that we believe has upside to the mid-$50s over the next twelve to eighteen months. We are confident this drop down strategy will be employed by the company over the next two to four years that will increase both the size, revenue, and distributable cash flow for RRMS.
Not only does the company have value as equity play but we also like them as a dividend play with a very strong, safe 5% yield that should continue to grow as well.
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