14 Large-Cap MLP Stocks For Dividend Lovers

|
 |  Includes: BPL, BWP, CMLP, EEP, EPD, ETP, KMP, MMP, MWE, NRP, NS, OKS, PAA, WPZ
by: Insider Monkey

For many investors, publicly traded Master Limited Partnerships can be valuable tools for diversification. As partnerships, MLPs are subject to a special tax code and avoid federal and state corporate income taxes. Hence, their “distributions” to investors are partially or entirely tax-deferred. Most MLPs are high yielders and increase their distributions to investors each quarter, achieving a consistent dividend growth for several years. However, investing in MLPs can be tricky due to the disadvantages of holding them in tax-deferred accounts. Investors should consult with their tax-advisors before adding MLPs in their portfolios.

Defensive investors love high dividend yielding stocks that have long records of increasing payments. We believe MLPs are attractive options for conservative investors that seek downside protection. Moreover, many MLPs have become much more appealing to defensive investors due to the recent downturn in stock markets. For such investors, we provided a list of 14 large cap MLP stocks with high dividend yields. The market data are sourced from Fidelity. All companies in this list have a 12-month dividend yield of at least 5%. These stocks also have market capitalizations above $3 billion and positive average dividend growth over the past five years. The average dividend yield of these 14 stocks is 7.00%, while their five-year average dividend growth is 6.29% on average. Since the beginning of 2011, these stocks returned -3.90% vs. -5.23% for the SPY.

Inergy LP (NRGY): Inergy LP is a U.S. energy partnership distributing propane in the United States. NRGY lost -28.58% since the beginning of this year and has a 10.66% dividend yield. In the past five years, NRGY increased its dividend payments by 5.28% annually. The stock recently traded at $26.46 and has a market cap of $3.43B. Jean-Marie Eveillard’s First Eagle holds the largest NRGY position among the 300-plus funds we are tracking (see Jean Marie Eveillard’s top stock picks here).

Boardwalk Pipeline Partners (NYSE:BWP): Boardwalk Pipeline Partners is a U.S. energy partnership that provides natural gas transportation and storage services in the United States. BWP lost -17.68% since the beginning of this year and the stock now has an 8.59% dividend yield. In the past five years, BWP increased its dividend payments by 6.68% annually. The stock recently traded at $24.56 and has a market cap of $4.84B. Jim Simons and Chuck Royce are prominent BWP investors.

Energy Transfer Partners (NYSE:ETP): Energy Transfer Partners is a limited partnership that operates in the natural gas transportation business in the United States. ETP lost -8.24% year-to-date and the stock now has a 8.24% dividend yield. In the past five years, ETP increased its dividend payments by 6.99% annually. The stock recently traded at $43.36 and has a market cap of $9.06B. Jim Simons holds the largest ETP position among the funds we are tracking (check out Jim Simons’ favorite stocks here).

Enbridge Energy Partners (NYSE:EEP): Enbridge Energy Partners is a U.S. energy partnership providing crude oil, liquid petroleum and natural gas transportation and storage services in the United States. EEP lost -7.85% since the beginning of this year and it has a 7.59% dividend yield. In the past five years, EEP increased its dividend payments by 2.86% annually. The stock recently traded at $27.34 and has a market cap of $7.17B. Jim Simons is the most prominent EEP investor.

NuStar Energy (NYSE:NS): NuStar Energy is a U.S. partnership that operates petroleum terminals and provides petroleum transportation services. NS lost -13.11% in 2011 and the stock now has a high dividend yield of 7.53%. In the past five years, NS increased its dividend payments by 4.35% annually. The stock recently traded at $57.40 and has a market cap of $3.62B. Jean-Marie Eveillard is among NuStar's investors.

Natural Resource Partners (NYSE:NRP): Natural Resource Partners is a limited partnership that owns and manages coal regions in the United States. NRP lost -8.34% since the beginning of this year and the stock now has a 7.45% dividend yield. In the past five years, NRP increased its dividend payments by 5.66% annually. The stock recently traded at $29.00 and has a market cap of $3.09B. Chuck Royce had nearly $20 Million in NRP at the end of June 2011 (see Chuck Royce’s other stock holdings here).

Kinder Morgan Energy Partners (NYSE:KMP): Kinder Morgan Energy Partners is a U.S. energy partnership providing energy products transportation and storage services. KMP has a 6.68% dividend yield and returned 1.13% since the beginning of this year. In the past five years, KMP increased its dividend payments by 7.26% annually. The stock recently traded at $67.82 and has a market cap of $22.38B. Michael Messner's Seminole Capital has the largest KMP position, holding more than $20 Million of the stock.

Buckeye Partners (NYSE:BPL): Buckeye Partners is a U.S. energy partnership that distributes petroleum in the United States. BPL lost -5.12% since the beginning of this year and it now has a 6.58% dividend. In the past five years, BPL increased its dividend payments by 5.84% annually. The stock recently traded at $60.45 and has a market cap of $5.55B. John Phelan’s MSD Capital and Michael Messner’s Seminole Capital are the most prominent BPL investors.

Plains All American Pipeline (NYSE:PAA): Plains All American Pipeline is a limited partnership that provides energy products transportation, storage and marketing services in the United States and Canada. PAA has a 6.50% dividend yield but lost -1.08% since the beginning of this year. In the past five years, PAA increased its dividend payments by 6.27% annually. The stock recently traded at $59.36 and has a market cap of $8.78B. Dmitry Balyasny had nearly $40 Million in PAA at the end of June.

Markwest Energy Partners (NYSE:MWE): Markwest Energy Partners is a U.S. partnership that provides natural gas transportation and processing services in the United States. MWE has a 6.03% dividend yield and gained 6.32% since the beginning of this year. In the past five years, MWE increased its dividend payments by 8.76% annually. The stock recently traded at $44.10 and has a market cap of $3.45B.

Enterprise Product Partners (NYSE:EPD): Enterprise Products Partners is a U.S. partnership that distributes natural gas and crude oil in the United States, Canada and the Gulf of Mexico. EPD has a 5.89% dividend yield and returned 1.05% year-to-date. In the past five years, EPD increased its dividend payments by 5.98% annually. The stock recently traded at $40.34 and has a market cap of $33.78B. John Osterweis holds nearly $70M of EPD (check out John Osterweis’ favorite stock picks here).

Oneok Partners (NYSE:OKS): Oneok Partners is an energy partnership providing natural gas processing, storage and transportation services in the United States. OKS has a 5.49% dividend yield and returned 9.49% since the beginning of this year. In the past five years, OKS increased its dividend payments by 4.25% annually. The stock recently traded at $41.77 and has a market cap of $8.12B. Jim Simons' Renaissance Technologies holds the largest OKS position among the funds we are tracking.

Williams Partners (NYSE:WPZ): Williams Partners is an American energy partnership that engages in natural gas exploration, processing, storage and transportation. WPZ has a 5.46% dividend yield and gained 16.15% since the beginning of this year. In the past five years, WPZ raised its dividend payments by 11.50% annually. The stock recently traded at $52.00 and has a market cap of $15.03B. Jean-Marie Eveillard's First Eagle holds more than $85 Million of WPZ.

Magellan Midstream Partners (NYSE:MMP): Magellan Midstream Partners is a U.S. partnership that provides transportation and storage services for refined petroleum products. MMP has a 5.29% dividend yield and returned 6.50% since the beginning of this year. In the past five years, MMP increased its dividend payments by 6.33% annually. The stock recently traded at $57.81 and has a market cap of $6.45B. Osterweis Capital had more than $60 Million in MMP at the end of June 2011.

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