Master Limited Partnerships (MLPS) provide investors income-generating assets with strong secular industry tailwinds. As the Federal Reserve drives down short-term interest rates, MLPs provide much needed current income. MLPs provide stable yields and are often times higher than those of common stocks. In a highly correlated, "risk-on risk-off" world, MLPs provide access to asset classes that is less correlated to stocks and bonds. MLPs have only modest direct commodity sensitivity, as the Company's business model is derived from fee-based contracts that are largely insensitive to commodity price fluctuations.
MLPs are a limited partnership that is publicly traded on a securities exchange. MLPs combine the tax benefits of a limited partnership with the liquidity of publicly traded securities. MLPs provide access to a low beta asset class with rich dividend yields.
MLP Screen Criteria:
- Market Capitalization greater than $3.5 billion
- Beta is below 1.0
- Dividend Yield greater than 4.0%
Kinder Morgan Energy Partners LP (KMP)
Market Capitalization: $28.5 billion
Beta: 0.38
Dividend Yield: 5.8%
EV / EBITDA: 14.4x
El Paso Pipeline Partners, L.P. (EPB)
Market Capitalization: $7.4 billion
Beta: 0.21
Dividend Yield: 5.6%
EV / EBITDA: 9.5x
ONEOK Partners, L.P. (OKS)
Market Capitalization: $11.5 billion
Beta: 0.43
Dividend Yield: 4.3%
EV / EBITDA: 14.3
Regency Energy Partners LP (RGP)
Market Capitalization: $3.9 billion
Beta: 0.81
Dividend Yield: 7.2%
EV / EBITDA: 18.9x
Magellan Midstream Partners LP (MMP)
Market Capitalization: $7.6 billion
Beta: 0.34
Dividend Yield: 4.8%
EV / EBITDA: 15.5x
Boardwalk Pipeline Partners, LP (BWP)
Market Capitalization: $5.7 billion
Beta: 0.21
Dividend Yield: 7.7%
EV / EBITDA: 13.6x
Dividend Yields:
MLPs provide investors with strong dividend yields in a low interest rate environment.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
