MarkWest Energy Partners, L.P. (NYSE:MWE) was formed in 2002 as a limited partnership that is focused on gathering, processing, and transporting natural gas, natural gas liquids, and crude oil. It has projects in high potential areas such as the Marcellus Shale, Huron/Berea Shale, Woodford Shale, Granite Wash, and Haynesville Shale, all of which are expected to provide additional production growth in the future. Here are three reasons to consider buying the stock:
1) MarkWest has a strong history of making dividend payments. The company has paid a dividend every quarter since its inception. It also has been raising the dividend on a regular basis. For example, in 2002, the quarterly dividend was 11 cents per share, but thanks to frequent increases, it is now 80 cents per quarter. MarkWest offers a yield of nearly 6% now, and with a history of dividend growth, it could be poised to keep raising the payout.
2) MarkWest has been reporting solid financial results. For the second quarter that ended on June 30, 2012, it reported distributable cash flow of $91.2 million and $200.4 million for the six months ended June 30, 2012. During the second quarter, the company saw a $300 million increase in its credit facility and it also received net proceeds of $427 million from an equity offering. Both of these events improve the balance sheet and increase financial flexibility.
3) Jim Cramer is a steady source of new ideas for investors, since he has a solid track record as a stock picker. A recent "Lightning Round" summary in a CNBC article states some of the positives for buying this stock - "This is a good company," said Cramer. "It's a play on the Marcellus Shale."
Here are some key points for MWE:
- Current share price: $55.34
- The 52 week range is $45.36 to $61.60
- Earnings estimates for 2012: $2.26 per share
- Earnings estimates for 2013: $2.12 per share
- Annual dividend: $3.20 per share which yields 5.7%
Data is sourced from Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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