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MLP "Yield + CAGR" Spreadsheets

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


Company Q2-14 Consensus Total Bonds DCF My Total Rtn Consensus Pr Impl Distribution
    Yield CAGR Return Ratings Accr RRRs - RRR Ratings CAGR /14 DCF
Large Cap Midstream
Buckeye Partners, L.P. BPL 5.30% 4.80% 10.10% BBB- 2.50 10.40 -0.30 2.6 5.10 95.86
Boardwalk Pipeline Partners, LP BWP 2.16% 1.00% 3.16% BBB- 4.00 10.70 -7.54 3.1 8.54 24.24
El Paso Pipeline Partners, L.P. EPB 7.18% 2.50% 9.68% BBB 1.20 10.30 -0.62 3.1 3.12 97.74
Enbridge Energy Partners, L.P. EEP 5.89% 2.00% 7.89% BBB 2.60 10.50 -2.61 2.9 4.61 106.57
Enterprise Products Partners L.P. EPD 3.63% 6.70% 10.33% BBB+ 1.20 9.70 0.63 1.6 6.07 67.62
Energy Transfer Partners, L.P. ETP 6.45% 4.00% 10.45% BBB- 2.50 10.70 -0.25 2.3 4.25 81.30
Kinder Morgan Energy Partners, L.P. KMP 6.71% 3.20% 9.91% BBB 1.20 10.00 -0.09 2.5 3.29 97.87
Magellan Midstream Partners LP MMP 2.92% 9.00% 11.92% BBB+ 1.00 10.00 1.92 2.4 7.08 72.27
NuStar Energy L.P. NS 7.06% 1.60% 8.66% BB+ 3.50 11.50 -2.84 3.1 4.44 107.88
ONEOK Partners, L.P. OKS 5.09% 6.70% 11.79% BBB 1.40 10.50 1.29 2.1 5.41 89.22
Plains All American Pipeline, L.P. PAA 4.20% 8.00% 12.20% BBB 1.10 10.00 2.20 1.8 5.80 86.01
Williams Partners L.P. WPZ 6.66% 5.30% 11.96% BBB 2.50 11.00 0.96 2.2 4.34 97.00

Average   5.27% 4.57% 9.84%         2.48

Company Q2-14 Consensus Total Bonds DCF My Total Rtn Consensus Pr Impl Distrib
    Yield CAGR Return Ratings Accr RRRs - RRR Ratings CAGR / DCF
Small Cap Midstream
Blueknight Energy Partners, L.P. BKEP 5.70% 8.70% 14.40% none 4.00 13.50 0.90 3.3 7.80 67.53
Genesis Energy LP GEL 3.93% 9.00% 12.93% BB- 3.00 11.80 1.13 2.2 7.87 78.85
Holly Energy Partners L.P. HEP 5.90% 6.00% 11.90% BB- 1.20 11.20 0.70 3.1 5.30 89.43
Oiltanking Partners, L.P. OILT 2.10% 9.20% 11.30% none 1.40 10.50 0.80 2.4 8.40 58.41
Spectra Energy Partners, LP SEP 4.17% 6.40% 10.57% BB 1.50 10.50 0.07 3.1 6.33 83.65
Sunoco Logistics Partners L.P. SXL 2.95% 9.00% 11.95% BBB- 1.00 10.00 1.95 2.6 7.05 63.33
TC PipeLines, LP TCP 6.27% 2.70% 8.97% BBB- 1.00 10.00 -1.03 3.6 3.73 85.26
Tesoro Logistics LP TLLP 3.22% 9.00% 12.22% BB- 2.00 10.00 2.22 1.8 6.78 85.51
Transmontaigne Partners L.P. TLP 6.03% 2.80% 8.83% none 1.00 10.00 -1.17 1.9 3.97 70.59

Average   4.47% 6.98% 11.45%         2.67

Company Q2-14 Consensus Total Bonds DCF My Total Rtn Consensus Pr Impl Distrib
    Yield CAGR Return Ratings Accr RRRs - RRR Ratings CAGR / DCF
Gathering & Processing
Access Midstream Partners, L.P. ACMP 3.62% 9.60% 13.22% BB- 1.10 12.00 1.22 1.7 8.38 70.12
American Midstream Partners, LP AMID 6.41% 6.30% 12.71% none 5.00 12.50 0.21 2.5 6.09 97.88
Atlas Pipeline Partners, L.P. APL 7.21% 7.30% 14.51% B+ 5.00 13.50 1.01 1.8 6.29 91.85
Crestwood Midstream Partners LP CMLP 7.43% 5.60% 13.03% BB 4.20 12.50 0.53 1.9 5.07 93.71
DCP Midstream Partners LP DPM 5.23% 7.00% 12.23% BBB- 2.60 11.50 0.73 1.9 6.27 93.71
EQT Midstream Partners, LP EQM 2.03% 9.60% 11.63% none 1.30 11.20 0.43 1.7 9.17 57.65
Exterran Partners, L.P. EXLP 7.60% 3.00% 10.60% B 1.70 11.50 -0.90 2.6 3.90 78.75
MarkWest Energy Partners, L.P. MWE 4.86% 7.60% 12.46% BB 2.70 12.50 -0.04 1.5 7.64 89.23
Targa Resources Partners LP NGLS 4.24% 7.40% 11.64% BB 1.60 12.20 -0.56 2.3 7.96 77.02
Regency Energy Partners LP RGP 5.96% 5.00% 10.96% BB 2.70 12.00 -1.04 2.8 6.04 93.66
Western Gas Partners LP WES 3.27% 9.10% 12.37% BBB- 1.20 10.90 1.47 1.9 7.63 79.37
EnLink Midstream Partners, LP ENLK 4.58% 8.70% 13.28% BBB 3.50 12.70 0.58 2.4 8.12 95.36

Average   5.20% 7.18% 12.39%         2.08

Click to enlarge

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


Company Q1-14 Consensus Total Bonds My Tot Rtn Consensus Pr Impl
    Yield CAGR Return Ratings RRRs - RRR Ratings CAGR

Atlas ARP 11.44% 4.00% 15.44% NR 13.50 1.94 2.4 2.06
BreitBurn BBEP 8.99% 2.00% 10.99% B- 12.50 -1.51 1.6 3.51
EagleRock EROC 12.05% 0.10% 12.15% B 14.00 -1.85 2.5 1.95
EV Energy EVEP 7.78% 3.50% 11.28% B- 13.00 -1.72 2.1 5.22
Linn Energy LINE 8.96% 2.00% 10.96% B+ 13.00 -2.04 2.4 4.04
Legacy LGCY 7.62% 3.00% 10.62% B- 12.50 -1.88 2.0 4.88
LRR Energy LRE 11.04% 2.00% 13.04% NR 13.50 -0.46 2.3 2.46
Mid-Con MCEP 8.88% 3.50% 12.38% NR 13.50 -1.12 1.8 4.62
Memorial MEMP 9.08% 2.80% 11.88% B- 13.00 -1.12 1.7 3.92
QR Energy QRE 10.27% 1.00% 11.27% B- 12.50 -1.23 2.1 2.23
Vanguard VNR 7.83% 3.70% 11.53% B 12.50 -0.97 1.9 4.67

Average   9.45% 2.51% 11.96%       2.07

Click to enlarge

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

Company Q2-14 Consensus Total Bonds DCF My Total Rtn Consensus Pr Impl
    Yield CAGR Return Ratings Accr RRRs - RRR Ratings CAGR

Atlas Energy, L.P ATLS 4.10% 20.00% 24.10% B 5.00 16.00 8.10 2.3 11.90
AllianceHoldings GP, L.P. AHGP 5.23% 9.00% 14.23% none 3.00 13.50 0.73 3.0 8.27
Energy Transfer Equity, L.P. ETE 2.44% 14.00% 16.44% BBB- 3.00 10.50 5.94 1.9 8.06
Kinder Morgan, Inc. KMI 4.63% 6.50% 11.13% BBB 1.00 10.50 0.63 2.3 5.87
NuStar GP Holdings, LLC NSH 5.57% 2.50% 8.07% BB+ 4.00 12.00 -3.93 3.0 6.43
ONEOK Inc. OKE 3.29% 10.00% 13.29% BBB 1.50 10.00 3.29 2.2 6.71
Plains GP Holdings, L.P. PAGP 2.13% 18.00% 20.13% BBB 2.00 9.50 10.63 2.2 7.37
Targa Resources Corp. TRGP 1.86% 18.50% 20.36% BB 2.00 13.00 7.36 2.5 11.14
Western Gas Equity Partners, LP WGP 1.59% 24.50% 26.09% none 3.00 11.50 14.59 1.6 9.91
Williams Companies, Inc. WMB 2.92% 16.50% 19.42% BBB 3.00 11.00 8.42 2.2 8.08
EnLink Midstream, LLC ENLC 1.73% 21.00% 22.73% B+ 4.00 16.00 6.73 3.0 14.27

Average   3.23% 14.59% 17.82%         2.38  

Click to enlarge