Seeking Alpha

MLP returns, yields likely to settle after decade of growth, analysts say

  • Income-minded investors keep pouring money into MLPs despite continued pressure on oil prices and as the Fed unwinds its bond-buying stimulus program, presumably sending longer-term interest rates higher.
  • Some MLP ETFs are yielding between 9-11%, but some analysts are warning that a more realistic target for MLP investors is closer to 5%-6%; straying too far afield runs the risk of leading investors into businesses that won't be able to sustain higher yields and could mask operational problems.
  • Plus. a higher profile with mainstream investors figures to dampen MLP's growth prospects somewhat, says Ballentine Partners' Austin Poirier: "With a flood of new investors coming into the MLP market, the days of low valuations and double-digit yields are probably behind us."
  • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPS, MLPG, MLPY, MLPJ, MLPX, AMU, YMLI, ATMP, MLPW, IMLP, ENFR, MLPC
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