I like the yield available in energy MLP's that are participating in the rapid increases in domestic energy production. I also like to see insiders step up to buy their stock when it hits a temporary rough patch which have hit a lot of firms in this space as May (-7.5%) was one of the worst months in the industry's history. EV Energy Partners (EVEP) offers income investors both these positive characteristics.
"EV Energy Partners, L.P. engages in the acquisition, development, and production of oil and natural gas properties in the United States." (Business description from Yahoo Finance)
7 reasons EVEP should reward long term income investors at $51 a share:
- It yields close to 6% (5.9%) and has almost doubled its payout over the past 5 ½ years.
- Two insiders picked up almost $1mm in new shares in four transactions in April and May.
- Operating cash flow improved over 60% from FY2009 to FY2011 and has continued to go up so far in FY2012.
- The company has significantly beat earnings estimates five of the last six quarters. Consensus estimates for FY2012 and FY2013 have risen nicely over the last month.
- The company is expected to grow revenues over 20% for both FY2012 and FY2013.
- It is more than 50% below the stock's median price target of $92 by the seven analysts that cover the firm.
- The stock is approaching technical levels it bounced off of last year around this time (See Chart).
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in EVEP over the next 72 hours.