8 MLPs Recently Announced Higher Dividends

by: Todd Johnson

Income investors can appreciate the good news when their Master Limited Partnerships (MLP's) are increasing their future quarterly dividends. A rising income stream is the goal of most income investors. Here are eight MLP's with recently announced increasing dividends.

Atlas Pipeline Partners LP (NYSE:APL)

Atlas Pipeline Partners is a midstream company providing reliable gas gathering, compression, processing services. The MLP owns 8,600 miles of gas pipeline assets in Oklahoma, Texas, Kansas, and Tennessee.

  • Stock Price: $34.45
  • Current Yield: 5.5%
  • Dividend Increase from Prior Quarter: 17%

The dividend yield is a solid 5.5%. I remain positive on APL as the prior quarter dividend was 40-cents. APL's balance sheet remains pristine in the MLP industry. I recommend buy and enjoy the ride.

Alliance Resource Partners LP (NASDAQ:ARLP)

Alliance Resource Partners was the first coal-MLP. Recently negative press about nuclear has created a short-term - or possibly long-term public demand - for coal.

  • Stock Price: $76.48
  • Current Yield: 4.80%
  • Dividend Increase from Prior Quarter: 3.7%
  • Dividend Increase Year-Over-Year: 13.90%

ARLP management, on July 27, announced quarterly results in which the news of positive coal pricing allowed ARLP to increase dividends. I like this name, although my past has focused more on the western side of U.S. coal production. ARLP is focused primarily on the eastern side.

The company remains positive on the future. The Gibson south mine has shown improvement and the company is clearly on my radar screen. For background, my coal thesis has focused upon Fording and Peabody Energy Corp. (BTU). I have witnessed the amazing BTU assets in person, and left shaking my head in amazement. In the Eastern U.S. it is a bit more tricky to extract coal.

Breitburn Energy Partners L.P. (BBEP)

BreitBurn Energy Partners is an independent oil and gas MLP. The business model is focused on the acquisition, exploitation and development of oil and natural gas properties. BBEP's assets are primarily located in California, Wyoming, Florida, Michigan, and Kentucky.

  • Stock Price: $19.23
  • Current Yield: 9%
  • Dividend Increase from Prior Quarter: 1.2%
  • Dividend Increase Year-Over-Year: 10.5%

BBEP, on July 27, acquired Wyoming oil and natural gas assets. The cost was $285-million and the properties were aligned with Linn Energy's methodology of acquiring long-lived assets with predictable revenue streams. I like this focus as revenue and dividends are easier to forecast.

Linn Energy, LLC (LINE)

Linn has become a proven commodity in the exploration and development MLP space. Management is aligned with unitholders, and they have been well-served over the years.

  • Stock Price: $40.21
  • Current Yield: 6.9%
  • Dividend Increase from Prior Quarter: 4.5%
  • Dividend Increase Year-Over-Year: 9.5%

It should be noted LINE has a rolling-equity $500-million in the 3rd quarter, 2011. This, as most secondaries can do, can result in temporary LINE common share weakness as institutions hedge their positions. LINE has been proactive in being one-step ahead of the curve in the acquisition camp.

LINE has provided investors all they could potentially expect. The company is active on the asset disposition and the asset acquisition trail. The returns have been nothing short of "terrific" per their historical past. I highly recommend accumulating a position.

NuStar GP Holdings, LLC (NYSE:NSH)
NSH is the general partner in NuStar GP Energy L.P. (NYSE:NS). NS is a leader in the asphalt refining markets. NS owns asphalt refineries, refined product terminals, petroleum, specialty liquids storage, and crude oil storage tank facilities.

  • Stock Price: $36.23
  • Current Yield: 5.3%
  • Dividend Increase from Prior Quarter: 1.7%
  • Dividend Increase Year-Over-Year: 6.6%

There are capital expenditure suggestions that NSH may expand into two new projects within the ever-growing Eagle Ford, Texas area. This could potentially bring in additional revenue to support a higher yield price. We shall wait for official confirmation on the conference calls. Sunoco Logistics Partners L.P. (NYSE:SXL)

Sunoco Logistics Partners is a MLP established to acquire, operate, crude oil and refined products pipelines, terminating and storage facilities, and crude oil facilities.

  • Stock Price: $85.79
  • Current Yield: 5.7%
  • Dividend Increase from Prior Quarter: 1.7%
  • Dividend Increase Year-Over-Year: 6.6%

SXL is a consistent fee-based pipeline and terminal asset provider. There is some risk to this position due to SXL's butane and oil contango exposure. The MLP has unique assets, which provide MLP diversity but individual risk exposure to butane and contango.

Williams Partners L.P. (NYSE:WPZ)
Williams Partners provides two core duties: gas pipeline operations, and midstream gas and liquids.

  • Stock Price: $55.73
  • Current Yield: 5.3%
  • Dividend Increase from Prior Quarter: 2.1%
  • Dividend Increase Year-Over-Year: 8.9%

The midstream activities include natural gas gathering, treating and processing business, and supply and marketing of gas and liquids.

Crosstex Energy Inc. (XTXI)

XTXI is a midstream natural gas business. The company provides traditional gas gathering, processing, transmission, distribution, and crude oil marketing. The company is based in Dallas, Texas.

  • Stock Price: $15.04
  • Current Yield: 2.7%
  • Dividend Increase from Prior Quarter: 11.1%

XTXI has provided recent positive stock returns due its Louisiana, to Mont Belvieu, Texas, supply pipelines. This activity is likely to produce increased revenue and distribution streams.

Disclosure: I am long APL, LINE.