Seeking Alpha

Tim Plaehn

 
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  • CyrusOne Is A Technology Growth Stock Masquerading As A REIT
    Wed, Nov. 19 CONE Comment!

    Summary

    • Data center REIT CyrusOne markets its services to enterprise-level customers rather than the usual Internet focus of other data center REITs.
    • Two year history of 20% year-over-year revenue growth and 30% plus FFO growth.
    • The CONE dividend should increase by 35% to 40% in March 2015, leading to a 30% or better 12-month total return.
  • Data Metrics For The Refinery MLPs: Post Earnings Valuations
    Editors' Pick • Sat, Nov. 15 ALDW, CVRR, NTI 10 Comments

    Summary

    • For the third quarter, ALDW and NTI paid significantly higher distributions on improved margin results. The CVRR payout dropped by half due to a refinery fire.
    • Crack spreads remain attractive so far in Q4, in spite of the big drop in the price of crude oil.
    • Refinery MLP sector dynamics are changing as ALDW adds a second refinery.
  • Spectra Energy Partners: A Conservative Yield Plus Income Growth Story
    Fri, Nov. 14 SEP 9 Comments

    Summary

    • Spectra Energy Partners has posted one of the best 12-month returns of the large-cap MLPs, up 34%.
    • An almost 100% fee-based business model shelters the Spectra revenues stream from volatile energy prices.
    • Investors who want an attractive yield plus near-10% growth from a very safe MLP business model should take a closer look at SEP.
  • Alon USA Partners Doubles Capacity To Support 15% Yield With Refinery Purchase
    Fri, Nov. 14 ALDW, ALJ 2 Comments

    Summary

    • Alon USA Partners will purchase the 74,000 bpd Krotz Springs refinery from Alon USA Energy.
    • Krotz Springs competes in the Gulf Coast Energy market, which has been less profitable than Alon's Big Springs refinery.
    • The acquisition should provide cash flow stability, but I do not expect it to increase distributions, which I already forecast at 15% of the current unit price.
  • Update: Calumet Specialty Products Earnings
    Tue, Nov. 11 CLMT 18 Comments

    Summary

    • CLMT report 1.4 times distribution coverage, reversing 6 quarters of failing to cover the distribution.
    • I reverse my prediction that Calumet will reduce its distribution payment.
    • Since 2012, the company has added interest expense and distribution payment amounts in excess of the current full EBITDA run rate gain since 2012.
  • CVR Refining In Danger Of Under Performance Again In Q4
    Tue, Nov. 11 CVRR 10 Comments

    Summary

    • A July refinery fire and facility shutdown resulted in lower throughput and a 40% distribution reduction for the CVRR Q3 distribution.
    • The CVRR operating margin per barrel has been below energy price crack spreads and the results of its peers for the last two quarters.
    • Disruptive energy prices in the fourth quarter will negatively affect CVRR results to a greater degree than for the other refining MLPs.
  • Update: Crestwood Midstream Partners Earnings And Distribution Growth
    Fri, Nov. 7 CMLP 4 Comments

    Summary

    • CMLP has increased its distribution for 3 quarters to allow DCF/unit to catch up with the payout rate.
    • DCF coverage has gone from 0.52 to 1.05 times in the last year.
    • There is a high probability that distribution growth will resume for Q4, resulting in a large unit price gain.
  • Improved Efficiencies Produce Big 'Turnaround' For Alon USA Partners
    Tue, Nov. 4 ALDW 5 Comments

    Summary

    • Alon USA Partners declared a $1.02 quarterly distribution, greater than the last three payouts combined.
    • Q3 saw a positive combination of refinery operating improvements and attractive crude spreads for ALDW.
    • With the more efficient refinery operations, ALDW is poised to pay 15% in distributions over the next four quarters.
  • Update: Eagle Rock Energy Partners Restarts Distribution Payments
    Wed, Oct. 29 EROC 18 Comments

    Summary

    • EROC declares a $0.07 quarterly distribution after two quarters without a payment to investors.
    • Earlier this year, EROC sold its midstream business, to focus on upstream operations.
    • The new distribution rate gives an 8.2% yield with potential for distribution growth in the upcoming quarters.
  • Fast-Growth Phillips 66 Partners Is 20% Overvalued Compared To Its Peers
    Fri, Oct. 24 PSXP 2 Comments

    Summary

    • PSXP carries the lowest yield of the fast-growth midstream MLPs.
    • Recent distribution and dropdown announcements point to lower-than-forecast distribution growth.
    • To carry a yield comparable to its peers, PSXP should be priced 15% to 23% lower than the current unit value.
  • ONEOK Partners Set For 6% Yield And Double Digit Unit Price Growth
    Tue, Oct. 21 OKS 9 Comments

    Summary

    • ONEOK Partners lost its high-growth MLP status when falling NGL prices reduced operating income.
    • ONEOK has moved to higher fee-based revenues and shed business to focus on midstream operations.
    • OKS looks like it could provide superior returns compared to its large-cap midstream peers.
  • Vanguard Natural Resources Puts Oil Price Decline Into Perspective
    Wed, Oct. 15 VNR 6 Comments

    Summary

    • Vanguard issued a press release showing DCF coverage at various crude oil and natural gas price scenarios.
    • The VNR distribution is safe down to $70 oil and $3.50 gas.
    • The VNR unit price jumped up on the news, and other upstream MLPs should be in a similar DCF vs. energy prices situation.
  • REIT Results Diverge And Avoid The Stock Market Correction
    Wed, Oct. 15 EQR, EXR, HCN 10 Comments

    Summary

    • The week-long market drop has lead to big declines in many of the income stock groups. REITs have generally bucked the trend and maintained values or gained.
    • With the S&P 500 near break-even for the year, REITs have become one of the best-performing sectors.
    • Large-cap, growth-focused REITs have proven to be a good diversification counter to U.S. corporate stocks.
  • Targa Resources Raises The Bar For MLP Acquisitions
    Tue, Oct. 14 NGLS 9 Comments

    Summary

    • Targa Resources Partners and Targa Resources Corp. have agreed to buy Atlas Pipeline Partners and the general partner interests.
    • The NGLS and TRGP distributions will be increased to 10% and 24% above current levels when the deal closes in Q1 2015.
    • The long term distribution growth rate will increase by one-third or more on what are already a top-shelf MLP and pure play GP.
  • Look At The MLP GP Companies For An Alternate Path To High Total Returns
    Sat, Oct. 11 ACMP, ENLC, ENLK 31 Comments

    Summary

    • Pure play MLP general partners collect incentive distributions rights from the managed MLPs.
    • The IDR stream can grow at 2 to 3 times the rate of the annual MLP distribution growth.
    • The expected GP total return is share price growth to match distribution growth plus the distribution yield.
  • Data Metrics For The Refinery MLPs - Alon USA Partners LP, CVR Refining LP, Northern Tier Energy LP
    Tue, Oct. 7 ALDW, CVRR, NTI 44 Comments

    Summary

    • Variable distribution MLPs offer an interesting and challenging investment opportunity.
    • The variable pay refinery MLPs currently could produce 10% yields and 20% total returns with the right entry timing.
    • This is the first of an article series that will provide the important data need to understand the refinery MLPs.
  • The Linn Energy Upstream MLP Model May No Longer Be Working
    Fri, Oct. 3 LINE 82 Comments

    Summary

    • Linn Energy has not increased its distribution rate since the first quarter of 2012. What is the reason.
    • An increasing percentage of net cash from operations is being spent on sustaining production, reducing cash available for distribution.
    • With the recent asset swaps, sales and purchases reverse the trend and allow Linn to restart distribution growth?
  • Pros And Cons Of The American Capital Agency Switch To Monthly Dividends
    Wed, Oct. 1 AGNC 16 Comments

    Summary

    • AGNC has announced it will start paying monthly dividends in November.
    • The company will also provide an estimated NAV each month, which may be of greater importance to investors.
    • Monthly dividends will not hide the risks of the highly leveraged MBS portfolio game, but the monthly NAVs will give early warning of earnings and book value surprises.
  • Share Price To NAV Discounts Widen To Increase Attractiveness Of MLP Closed-End Funds
    Tue, Sep. 30 KED, NML, NMM 5 Comments

    Summary

    • September has been a down month for MLPs, with the primary MLP index off 2.5% for the month.
    • MLP CEF share prices have dropped by up to 7.7% for the month as share price to NAV discounts have widened along with the sector declines.
    • Some of the best MLP CEFs are trading at their widest discounts in a year, putting even more value on the shares.
  • Is Magellan Midstream The Best Of The Large-Cap MLPs?
    Fri, Sep. 26 MMP 33 Comments

    Summary

    • The yield and distribution growth averages of about 5% and 6% will provide steady, if unspectacular total returns.
    • Magellan Midstream is one of just a few large-cap midstream MLPs growing distributions by greater than 15% per year.
    • Magellan Midstream uses its simplified, no-IDR payments partnership structure to fund growth without raising capital in the equity markets.
  • Get Ahead Of The Next Drop Down And Unit Price Jump For Phillips 66 Partners
    Wed, Sep. 24 PSXP 11 Comments

    Summary

    • PSXP is the most richly valued growth MLP, as indicated by its current 1.74% distribution yield.
    • The recent price pull back from $80 to less than $70 presents a buying opportunity before the next drop down announcement.
    • PSXP could top $100 early in 2015 if growth projections are confirmed.
  • Enbridge Energy Partners: Regulated Pipeline Business Equals Steady But Slow Growth
    Tue, Sep. 23 EEP 10 Comments

    Summary

    • Among the largest MLPs, Enbridge Energy Partners has ranked near the bottom in annual distribution growth.
    • Proactive steps to improve the business structure will still lead to just a 5% growth rate.
    • With mostly a FERC-regulated business, EEP may be stuck as a low-growth, moderate-yield MLP. As the sponsor, Enbridge, Inc. should do more to increase growth.
  • Energy Transfer Partners Accelerate Distribution Growth To Produce 25% Total Return
    Sun, Sep. 21 ETP 9 Comments

    Summary

    • In the last year, ETP has shifted from a no-growth, high-yield midstream MLP to one that is increasing distributions at an above average rate.
    • The ETP total return has lagged the AMZ average, even as distribution growth accelerates.
    • Reaching a peer average 5.6% yield would result in a 30% total return by the end of 2015.
  • 20% Yielding Western Asset Mortgage Shifts Holdings To Support The Yield And Book Value
    Thu, Sep. 18 WMC 5 Comments

    Summary

    • While it seems hard to believe, WMC actually generates enough net investment income to support the current 20% yield.
    • The company's problem has been to also maintain book value, which has eroded as fast as the dividends paid out.
    • WMC has shifted from agency only to a more hybrid MBS portfolio, which has increased net interest income, and hopefully stabilized the book value.
  • Legacy Reserves Makes A Bet To Change The High-Yield Upstream MLP Model
    Tue, Sep. 16 LGCY 17 Comments

    Summary

    • Over the last few years, upstream MLPs have struggled to grow distribution rates.
    • Legacy Reserves already stands apart with a history of quarterly distribution increases.
    • The IDRs for production assets strategy may allow LGCY to double distribution growth to 6.5% per year, on top of the current 8.4% yield.
  • Overvalued Enterprise Products Partners Will Lag Peers For The Next Several Years
    Tue, Sep. 16 EPD 56 Comments

    Summary

    • Over the last year, EPD has been the best performing large-cap MLP, doubling the average return of its peers.
    • Unit price gains have pushed the EPD yield to 1.0% less than faster growing, high quality, large cap MLPs.
    • Best case for EPD is 10% total returns for the next several years, while other MLPs will do mid-teens returns and better.
  • The QR Energy Merger Yields No Measurable Benefit For BreitBurn Energy Partners Investors
    Thu, Sep. 11 BBEP 35 Comments

    Summary

    • BreitBurn Energy Partners will acquire QR Energy to become the second-largest upstream MLP.
    • A merger of the two high-yield upstream MLPs does not result in potential for increased BreitBurn Energy distribution growth.
    • The merger appears to be a merger for the sole goal of getting larger. BreitBurn Energy investors will get no additional benefit, but QR Energy investors come out significantly ahead.
  • Altisource Residential Continues To Pile Up Income, Fueling Future Dividend Growth
    Tue, Sep. 9 RESI 5 Comments

    Summary

    • RESI just increased its dividend by 22%, double three quarters ago, with more to come.
    • The business model of buying non-performing loans to acquire single family homes for rental is producing tremendous results.
    • The current pace of dividend growth plus a moderate yield compression would result in a 100% one year total return.
  • REIT-Like Partnership ATAX Pays 8% In Tax-Free Distributions
    Mon, Sep. 8 ATAX 10 Comments

    Summary

    • ATAX is a publicly traded partnership investing in tax-exempt mortgage revenue bonds.
    • The company operates in the niche financing of tax-advantaged low income housing construction and rehabilitation.
    • The 8.2% yield appears secure, but some growth in cash available for distribution would make the investment more secure.
  • Northern Tier Energy - The Best Of The Variable Distribution MLPs
       • Mon, Sep. 8 NTI 12 Comments

    Summary

    • A small number of fertilizer and refinery MLPs have 100% of cash flow variable payout distribution policies. Buy these when prices are down to earn big when distribution are up.
    • Northern Tier Energy carries an 8% yield based on the average of 4 most recent distributions.
    • Pending organic growth projects will increase the NTI refinery efficiency, keeping the refiner profitable when others are losing money.
  • Ferrellgas Partners Poised To Go From Boring To Growing With Jump Into Energy Midstream
    Thu, Sep. 4 FGP 11 Comments

    Summary

    • Ferrellgas Partners has paid the same $0.50 quarterly distribution for 20 consecutive years.
    • The May 2014 purchase of Sable Environmental puts the company into a fast-growth midstream sector.
    • Ferrellgas reports fiscal year-end results in late September. A good time to announce the first distribution increase in the partnership's history.
  • The Annaly Capital Share Price Breakdown Graphically Illustrated
    Tue, Sep. 2 NLY 13 Comments

    Summary

    • After a very bad 2013, NLY has produced strong returns in 2014. Has the stock fully recovered?
    • Paying out capital gains in the dividends increased the size of the decline when rates increased.
    • Over the recent two-year mortgage rate cycle, NLY has lost money even as rates returned to the previous levels.