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  • MLP "Yield + CAGR" Spreadsheets 0 comments
    Jul 5, 2014 8:13 AM

    I need to note that I have not updated the consensus analyst rating stats since the end of Q1-14. That would normally cause me to be reluctant to post these spreadsheets because of the stale data. I am posting the anyway - due to the potential interest caused by my most recently published SA article.

    The spreadsheet that follows uses "yield + CAGR - RRR" to arrive at a conclusion on which MLPs are under valued, correctly valued, and over valued. While MLPs with lower "historical DCF projection accuracy" are given a higher Required Rate of Return, some of those MLPs still fall into the under valued category.

    I would not buy any of the MLPs with accuracy ratings above three and a half. (Note - the higher the rating - the worse the accuracy.) I do currently own one with such a high rating. That has turned out to be a mistake.

    Yield + CAGR Total Return Expectations


    CompanyQ2-14ConsensusTotalBondsDCFMyTotal RtnConsensusPr ImplDistribution
      YieldCAGRReturnRatingsAccrRRRs- RRRRatingsCAGR/14 DCF
    Large Cap Midstream
    Buckeye Partners, L.P.BPL5.30%4.80%10.10%BBB-2.5010.40-0.302.65.1095.86
    Boardwalk Pipeline Partners, LPBWP2.16%1.00%3.16%BBB-4.0010.70-7.543.18.5424.24
    El Paso Pipeline Partners, L.P.EPB7.18%2.50%9.68%BBB1.2010.30-0.623.13.1297.74
    Enbridge Energy Partners, L.P.EEP5.89%2.00%7.89%BBB2.6010.50-2.612.94.61106.57
    Enterprise Products Partners L.P.EPD3.63%6.70%10.33%BBB+1.209.700.631.66.0767.62
    Energy Transfer Partners, L.P.ETP6.45%4.00%10.45%BBB-2.5010.70-0.252.34.2581.30
    Kinder Morgan Energy Partners, L.P.KMP6.71%3.20%9.91%BBB1.2010.00-0.092.53.2997.87
    Magellan Midstream Partners LPMMP2.92%9.00%11.92%BBB+1.0010.001.922.47.0872.27
    NuStar Energy L.P.NS7.06%1.60%8.66%BB+3.5011.50-2.843.14.44107.88
    ONEOK Partners, L.P.OKS5.09%6.70%11.79%BBB1.4010.501.292.15.4189.22
    Plains All American Pipeline, L.P.PAA4.20%8.00%12.20%BBB1.1010.002.201.85.8086.01
    Williams Partners L.P.WPZ6.66%5.30%11.96%BBB2.5011.000.962.24.3497.00

    Average 5.27%4.57%9.84%    2.48

    CompanyQ2-14ConsensusTotalBondsDCFMyTotal RtnConsensusPr ImplDistrib
      YieldCAGRReturnRatingsAccrRRRs- RRRRatingsCAGR/ DCF
    Small Cap Midstream
    Blueknight Energy Partners, L.P.BKEP5.70%8.70%14.40%none4.0013.500.903.37.8067.53
    Genesis Energy LPGEL3.93%9.00%12.93%BB-3.0011.801.132.27.8778.85
    Holly Energy Partners L.P.HEP5.90%6.00%11.90%BB-1.2011.200.703.15.3089.43
    Oiltanking Partners, L.P.OILT2.10%9.20%11.30%none1.4010.500.802.48.4058.41
    Spectra Energy Partners, LPSEP4.17%6.40%10.57%BB1.5010.500.073.16.3383.65
    Sunoco Logistics Partners L.P.SXL2.95%9.00%11.95%BBB-1.0010.001.952.67.0563.33
    TC PipeLines, LPTCP6.27%2.70%8.97%BBB-1.0010.00-1.033.63.7385.26
    Tesoro Logistics LPTLLP3.22%9.00%12.22%BB-2.0010.002.221.86.7885.51
    Transmontaigne Partners L.P.TLP6.03%2.80%8.83%none1.0010.00-1.171.93.9770.59

    Average 4.47%6.98%11.45%    2.67

    CompanyQ2-14ConsensusTotalBondsDCFMyTotal RtnConsensusPr ImplDistrib
      YieldCAGRReturnRatingsAccrRRRs- RRRRatingsCAGR/ DCF
    Gathering & Processing
    Access Midstream Partners, L.P.ACMP3.62%9.60%13.22%BB-1.1012.001.221.78.3870.12
    American Midstream Partners, LPAMID6.41%6.30%12.71%none5.0012.500.212.56.0997.88
    Atlas Pipeline Partners, L.P.APL7.21%7.30%14.51%B+5.0013.501.011.86.2991.85
    Crestwood Midstream Partners LPCMLP7.43%5.60%13.03%BB4.2012.500.531.95.0793.71
    DCP Midstream Partners LPDPM5.23%7.00%12.23%BBB-2.6011.500.731.96.2793.71
    EQT Midstream Partners, LPEQM2.03%9.60%11.63%none1.3011.200.431.79.1757.65
    Exterran Partners, L.P.EXLP7.60%3.00%10.60%B1.7011.50-0.902.63.9078.75
    MarkWest Energy Partners, L.P.MWE4.86%7.60%12.46%BB2.7012.50-0.041.57.6489.23
    Targa Resources Partners LPNGLS4.24%7.40%11.64%BB1.6012.20-0.562.37.9677.02
    Regency Energy Partners LPRGP5.96%5.00%10.96%BB2.7012.00-1.042.86.0493.66
    Western Gas Partners LPWES3.27%9.10%12.37%BBB-1.2010.901.471.97.6379.37
    EnLink Midstream Partners, LPENLK4.58%8.70%13.28%BBB3.5012.700.582.48.1295.36

    Average 5.20%7.18%12.39%    2.08

    I do not list the stat on historical DCF projection accuracy in the E&P spreadsheet. Every one in this sub-sector would have bad ratings. This would also be a sub-sector where my level of confidence in all CAGR projections are low.

    Yield + CAGR Total Return Expectations


    CompanyQ1-14ConsensusTotalBondsMyTot RtnConsensusPr Impl
      YieldCAGRReturnRatingsRRRs- RRRRatingsCAGR

    AtlasARP11.44%4.00%15.44%NR13.501.942.42.06
    BreitBurnBBEP8.99%2.00%10.99%B-12.50-1.511.63.51
    EagleRockEROC12.05%0.10%12.15%B14.00-1.852.51.95
    EV EnergyEVEP7.78%3.50%11.28%B-13.00-1.722.15.22
    Linn EnergyLINE8.96%2.00%10.96%B+13.00-2.042.44.04
    LegacyLGCY7.62%3.00%10.62%B-12.50-1.882.04.88
    LRR EnergyLRE11.04%2.00%13.04%NR13.50-0.462.32.46
    Mid-ConMCEP8.88%3.50%12.38%NR13.50-1.121.84.62
    MemorialMEMP9.08%2.80%11.88%B-13.00-1.121.73.92
    QR EnergyQRE10.27%1.00%11.27%B-12.50-1.232.12.23
    VanguardVNR7.83%3.70%11.53%B12.50-0.971.94.67

    Average 9.45%2.51%11.96%   2.07

    While there are still several General Partner stocks with attractive "yield + CAGRs" due to the CAGR projections being so high - it is also a sector where yields are very near historical lows. This is a sub-sector with lower yields because of the high CAGRs. But I still have the strong impression that the market believes that "yields matter". Add to that, the current sector average Price/DCF ratio is well above the historical high.

    Yield + CAGR Total Return Expectations

    CompanyQ2-14ConsensusTotalBondsDCFMyTotal RtnConsensusPr Impl
      YieldCAGRReturnRatingsAccrRRRs- RRRRatingsCAGR

    Atlas Energy, L.PATLS4.10%20.00%24.10%B5.0016.008.102.311.90
    AllianceHoldings GP, L.P.AHGP5.23%9.00%14.23%none3.0013.500.733.08.27
    Energy Transfer Equity, L.P.ETE2.44%14.00%16.44%BBB-3.0010.505.941.98.06
    Kinder Morgan, Inc.KMI4.63%6.50%11.13%BBB1.0010.500.632.35.87
    NuStar GP Holdings, LLCNSH5.57%2.50%8.07%BB+4.0012.00-3.933.06.43
    ONEOK Inc.OKE3.29%10.00%13.29%BBB1.5010.003.292.26.71
    Plains GP Holdings, L.P.PAGP2.13%18.00%20.13%BBB2.009.5010.632.27.37
    Targa Resources Corp.TRGP1.86%18.50%20.36%BB2.0013.007.362.511.14
    Western Gas Equity Partners, LPWGP1.59%24.50%26.09%none3.0011.5014.591.69.91
    Williams Companies, Inc.WMB2.92%16.50%19.42%BBB3.0011.008.422.28.08
    EnLink Midstream, LLCENLC1.73%21.00%22.73%B+4.0016.006.733.014.27

    Average 3.23%14.59%17.82%    2.38 

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