Seeking Alpha
Profile| Send Message|
( followers)  

As oil prices rise, costs go up for transportation companies as well, forcing them to raise transportation prices in order to keep their profit margins. While one might think of higher oil & gas prices as a negative signal for transporters, recent research supports the opposite hypothesis: There is a strong correlation between oil & gas transporters and retail gasoline prices, particularly for the long-run. As crude oil is hovering around $110, the profits of oil & gas transporters will continue their upside movement. Here is a list of the top six oil & gas transporters with nice dividends, all of which have a minimum market cap of $2 billion, and a maximum P/E ratio of 25:

Oneok Partners, L.P. (NYSE:OKS): The Oklahoma-based Oneok, formerly known as Northern Border Partners, gathers, processes, stores and transports natural gas in the U.S. Oppenheimer suggests an outperform rating for Oneok Partners, while UBS, Citigroup, Stifel Nicolaus, Banc of America and SMH Capital recommend buying. Oneok’s market capitalization is $8.78 billion, and its P/E ratio is 24.68. The forward P/E ratio is 20.08, and the company had a 3.66% EPS growth during the last five years. Oneok had a 5.46% net profit margin in 2010, while it paid a yield of 5.34%. Recent dividend history is as follows:

Apr 27, 2011

$1.15

Jan 27, 2011

$1.14

Oct 27, 2010

$1.13

Jul 28, 2010

$1.12

Boardwalk Pipeline Partners, LP (NYSE:BWP): Boardwalk Pipeline owns and operates three natural gas pipeline systems to storage and transport of natural gas. The company owned and operated about 14.200 miles of pipeline as of Dec 31, 2009. Credit Suisse and Wachovia suggested outperform for BWP, while Ladenburg Thalmann and UBS recommend buying. Having a market cap of $6.38 million, BWP has a 24.18 P/E ratio, and a 19.96 forward P/E ratio. Boardwalk’s earnings increased by 74.92% this year. Insiders own 53.42% of the company. With a profit margin of 25.91%, and a dividend yield of 6.28%, Boardwalk is a pretty nice stock for dividend lovers. Recent dividend payments of BWP per share were as follows:

Feb 15, 2011

$0.52

Oct 28, 2010

$0.515

Jul 29, 2010

$0.51

Apr 29, 2010

$0.505

NuStar Energy LP (NYSE:NS): NuStar, founded in 1999, is in the business of terminalling, transportation and storage of petroleum products in the U.S., the U.K., Canada, the Netherlands and Mexico. Stifel Nicolaus and AG Edwards recommend buying NS shares. NuStar’s market capitalization is $4.37 billion, and its trailing ratio is 21.34. The forward P/E ratio is 19.06, while the company is expected to have a 11.64% EPS growth next year. Having a 5.43% profit margin, NS paid a 6.36% dividend. Recent dividend history is:

Feb 4, 2011

$1.075

Oct 28, 2010

$1.075

Aug 4, 2010

$1.065

May 5, 2010

$1.065

Spectra Energy Partners, LP (NYSE:SEP): SEP is the investment arm of Spectra Energy Corp. The company owns and operates about 1,400-miles of an East Tennessee interstate natural gas transportation system. Morgan Keegan and Wachovia suggested an outperform rating for SEP, while Citigroup and AG Edwards recommend buying. The market cap of SEP is $3.17 billion, and its trailing ratio is 20.5, while the forward P/E is 18.73. Spectra Energy had an annualized EPS growth of 5.82% over the last five years. 41.19% of the company is owned by insiders. Having an impressive profit margin of 74.81%, SEP shareholders enjoyed a dividend yield of 5.28% in 2010. Recent dividend dates of SEP per share are have been:

Feb 2, 2011

$0.45

Oct 29, 2010

$0.44

Jul 30, 2010

$0.43

Apr 30, 2010

$0.42

Sunoco Logistics Partners, LP (NYSE:SXL): SXL is in the business of transporting, terminalling and storing crude oil and refined products, as well as purchasing and selling crude oil in the U.S. Wachovia suggested outperform for Sunoco, while Citigroup and Jesup & Lamont recommend buying. With a $2.96 billion market capitalization, SXL has a trailing ratio of 9.6, and a forward P/E ratio of 15.34. The company had an EPS growth of 31.78% during the last five years, while its earnings increased by 44.2% this year. Sunoco Logistics had a profit margin of 4.44% last year, which paid a dividend yield of 5.28%. Recent dividend payments of SXL were:

Feb 4, 2011

$1.18

Nov 4, 2010

$1.17

Aug 5, 2010

$1.14

May 6, 2010

$1.115

TC PipeLines, LP (TCLP): The Texas-based TCLP transports natural gas in the U.S., Mexico and eastern Canada. The company holds a 46.45% interest in Great Lakes Gas Transmission Ltd. TC PipeLines has a market capitalization of $2.25 billion, and a P/E ratio of 16.72, while its forward P/E is 16.16. TCLP’s earnings increased by 24.26% this year. With a dividend yield of 6.17%, and a profit margin of 70.27%, TCLP is a fabulous stock for dividend lovers. Recent dividend history is:

Apr 27, 2011

$0.75

Jan 27, 2011

$0.75

Oct 27, 2010

$0.75

Jul 28, 2010

$0.73


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Top 6 Oil & Gas Transporters Paying Substantial Dividends