Upstream MLPs have outperformed YTD but hurdles remain, analyst says

• Upstream MLPs have outperformed to start 2015, generating average total returns of 10%, but yields have also come down from their peak to ~20% YTD, and Wunderlich analyst Abhishek Sinha thinks the average yield will continue to slip to 12%-14%, as more companies are forced to cut distributions.
• The analyst expects cuts to come from Vanguard Natural Resources (NYSE:VNR), Legacy Reserves (NASDAQ:LGCY) and LRR Energy (NYSE:LRE), following the likes of EV Energy Partners (NASDAQ:EVEP-OLD), Breitburn Energy Partners (BBEP) and New Source Energy Partners (NSLP).
• Sinha also says he is less concerned that Viper Energy Partners (NASDAQ:VNOM) could be hurt by rig count reductions after parent Diamondback Energy (NASDAQ:FANG) reaffirmed its intentions to continue to run its two-rig program on VNOM’s acreage.