6 MLPs With Robust Yield In Low Interest Rate Environment

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Includes: BWP, EPB, KMP, MMP, OKE, RGP
by: Bear Fight

Master Limited Partnerships (MLPS) provide investors income-generating assets with strong secular industry tailwinds. As the Federal Reserve drives down short-term interest rates, MLPs provide much needed current income. MLPs provide stable yields and are often times higher than those of common stocks. In a highly correlated, "risk-on risk-off" world, MLPs provide access to asset classes that is less correlated to stocks and bonds. MLPs have only modest direct commodity sensitivity, as the Company's business model is derived from fee-based contracts that are largely insensitive to commodity price fluctuations.

MLPs are a limited partnership that is publicly traded on a securities exchange. MLPs combine the tax benefits of a limited partnership with the liquidity of publicly traded securities. MLPs provide access to a low beta asset class with rich dividend yields.

MLP Screen Criteria:

  • Market Capitalization greater than $3.5 billion
  • Beta is below 1.0
  • Dividend Yield greater than 4.0%

Kinder Morgan Energy Partners LP (NYSE:KMP)

Market Capitalization: $28.5 billion

Beta: 0.38

Dividend Yield: 5.8%

EV / EBITDA: 14.4x

El Paso Pipeline Partners, L.P. (NYSE:EPB)

Market Capitalization: $7.4 billion

Beta: 0.21

Dividend Yield: 5.6%

EV / EBITDA: 9.5x

ONEOK Partners, L.P. (OKS)

Market Capitalization: $11.5 billion

Beta: 0.43

Dividend Yield: 4.3%

EV / EBITDA: 14.3

Regency Energy Partners LP (NYSE:RGP)

Market Capitalization: $3.9 billion

Beta: 0.81

Dividend Yield: 7.2%

EV / EBITDA: 18.9x

Magellan Midstream Partners LP (NYSE:MMP)

Market Capitalization: $7.6 billion

Beta: 0.34

Dividend Yield: 4.8%

EV / EBITDA: 15.5x

Boardwalk Pipeline Partners, LP (NYSE:BWP)

Market Capitalization: $5.7 billion

Beta: 0.21

Dividend Yield: 7.7%

EV / EBITDA: 13.6x

Dividend Yields:

MLPs provide investors with strong dividend yields in a low interest rate environment.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.