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One of my favorite Energy MLP's reported earnings this week. Legacy Reserves (NASDAQ:LGCY) beat on the top and the bottom line and this earnings report should bolster the positive case for this income vehicle over the coming months.

Earnings highlights for Legacy
 

  • Distributable cash flow increased to $36.4 million in the first quarter of 2012 compared to $29.4 million in the fourth quarter of 2011.
  • Legacy's general and administrative expenses were $6.5 million or $4.91 per Boe during the first quarter of 2012 compared to $8.5 million or $6.68 per Boe during the fourth quarter of 2011.
  • Production increased 5% to 14,440 Boe per day in the first quarter of 2012 from 13,750 Boe per day in the fourth quarter of 2011.
  • Both production and SG&A expenses came down in the quarter.
  • Distributable cash flow per unit increased to $0.76 per unit in the first quarter of 2012 from $0.64 per unit in the fourth quarter of 2011.


Legacy Reserves - "Legacy Reserves LP, an independent oil and natural gas limited partnership, engages in the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent, and Rocky Mountain regions of the United States". (Business description from Yahoo Finance)

4 reasons the stock is a solid bargain for income investors at $28 a share.
 

  • The stock yields just less than 8% and has raised distribution payouts some 35% over the last five years despite the financial crisis.
  • Operating Cash Flow almost quintupled from FY2009 to FY2011.
  • This quarter marked the fourth straight quarter that the company beat earnings estimates and analysts expect double digit revenue growth in both FY2012 and FY2013.
  • The stock sells for around 7.5 times OCF. The median analysts' price target for the 8 analysts that cover the stock is $32.75 and Global Hunter Securities put an "Accumulate" on the stock in April.
Source: After Earnings, This 8% Yielder Still Looks Good