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mjtroll1 profile picture
regarding this statement

In a world where equity markets keep trading at "all-time highs" and looking "expensive", value dividend stocks, such as REITs, MLPs, and BDCs, still trade at very cheap valuations. Therefore, in case of any market turbulence or market correction, the downside potential should be very limited.

Rida..you really have the reverse touch of midas :) reits and mlps and bdcs
Rida why is the sector crashing today?
TradeNvest profile picture
MLPs suffer sharp losses as FERC nixes income tax allowance cost recovery

cbl has poor mgt and mostly weak locations. I see no catalyst for growth.
nkaln3 profile picture
How are you calculating a coverage ratio of 1.3 when Fidelity is showing annualized dividend of $2.26/share and earnings per share in 2017 of $0.50?
Cash flow v. EPS!
500MPH profile picture
At one time, Rich Kinder, aka “the liar” was thought to not do anything to harm his own vast holdings. These guys all can figure out ways to protect themselves before they put the screws to everyone else. I personally don’t get much comfort just because management has their money in it.
20$Bill profile picture
how did kinder aka the liar protect himself ?
Krypto profile picture
If management is not ethical and honest, hardworking and focused, it is something I would consider a negative.
Please do not buy these stocks juicy dividend. What you get thru dividend will not offset loss in the principal. Follow Jim Cramer's advice to avoid 10% yielders. In the current environment, cash is king. Hold on to it. There will be many dips and dividend cuts.
Rida Morwa profile picture
Hi Kenyatta,

The U.S. and global economy are thriving, and this is generally bullish for equities.

As for stocks, they do not go down one way. At a certain point, they become very cheap, and this is when "value investors" step in. We believe that the two stocks WPG and ETP are deep value stocks here.
I️ agree with your buying recommendations, but I️ believe the market will present better buying opportunities. “Interest rate hike season is here”
Krypto profile picture
No one has mentioned that ETP's Bayou Bridge pipeline was halted by a judge in Louisiana.

How much per day do they lose while that project stalls?
One small portion of the project was temp. suspended by a Judge after all permits were already issued and approved. All concerns were already addressed during permit process. Should be minimal impact and resolved quickly.
Krypto profile picture
xb: Well, the problem is any section of a pipeline that is shut down is a bottleneck, and from what I have read, the locals want to stop it, not modify it.
Right, I get that. My point was more that the impact is lessened by only a part being shut down vs the entire project... Equipment, manpower etc can be relocated in the meantime instead of sitting idle. Its also a rather small project in the big picture. The judges permit revocation, the way I read it, had more to do with the Army Corp of Engineers than anything.... Either way, I don't see much that can be brought up as a concern that wouldn't have been addressed during the permitting process which was approved. Long story short, bottleneck agreed, but losses can be minimized in the meantime vs a shutdown....
Helpful summary update on ETP.

If it keeps performing like this, we ETP long-termers will start feeling really good again.

Retired income/dividend-growth investor
Luckey Duckey Hunter profile picture

With IDR waiver at bare minimum this year and even lower next year for ETP, ETE’s cash flow will be tremendous and payout will likely be increased again.

What is your take on ETE, which has seen a great discount comparing to ETP the last few months. With the merger about 22 months away and likely at 1-1 ratio, is ETE not a discounted version of ETP?
Morningstar is pretty good with their MLP analysis. They have Fair Value for both ETP and ETE at 22. Kelcy Warren has most of his money invested in ETE. I own a ton of both of them, and think they'll do well in the future.
Luckey Duckey Hunter profile picture
Thanks T.

I traded all my ETP for ETE as I hold ETP via AMZA. I highly doubt KW will do anything less than 1-1 conversion when the two merge or IDR buyout.

My concern is that in the IDR buyout, how would that benefit ETE unit holders as any payment in cash or unit issuance will go to ETE but there is no clear guidance on how current ETE unit holders outside of KW will benefit.

Looking at the IDR formulation, ETE is golden as long as there is no merger and limited waiver. My assumption is that I will get a straight trade in merger but I can’t tell what I’ll get in IDR buyout. I can’t really find any info on what happened to other GPs’ unit holders such as Williams in their IDR elimination.
Luckey Duckey Hunter profile picture

In the case of Williams, the GO unit holders saw dividend increased of 50% but that is after dividend was decimated from 60 cents to 20 cents earlier. So this case is strange. But if ETE unit holders can get that juicy 50% increase or matching ETP payout amount, I’ll retire.
Philipsonh profile picture
" We are currently in a raging bull market" . To interpret, if you have cash available, it is a good time to buy in the noted sectors, but if you are fully invested, February took its toll on your account's principal.
a fing men
EPD yields 6.77% for the moment and it is the MLP about which one most often hears the phrase “an equity that lets one sleep at night”. I looked at EPD’s close on Friday, and it did me better than let me sleep. I passed out.
Any yield over 7-8% is a bug red flag....stay away
It's not as clear cut as that... Doing in depth DD is the only way to determine if a yeild is elevated for the right or wrong reasons... Wrong reasons being irrationality... My best ever purchase was a 20+% yielder in the MLP 'crisis' in 2016... It has since gained back 200+% in share price and raised its dividend in the last two qtrs, my cost yield on those shares is now over 27%..it doesn't always happen like that but seeing a 7-8% yeild and immediately closing the doors, IMO, can make you miss some great opportunities
socalquest profile picture
For ETP, I like to own it via an ETF like AMLP or AMZA, or through a closed-end fund like JMF. It's safer to own a basket of MLPs than a single issuer no matter how good the numbers are. Don't chase for higher yield. There's a definitely a reason why it's in double-digits. Stay safe folks.
frystinger profile picture
I’ve owned etp for a long time and owned sxl. Have merged shares.. out of all those double digit yields mention etp is the safest... earnings and projects coming online are in the upswing... yes the environment may have been bad in terms of sentiment but the actual environment looks pretty good now... I don’t see why etp couldn’t yield 8% by year end...
frystinger profile picture
It really wouldn’t justify this yield if coverage is good and or increasing as the year folds out and sxl continues its streak of raising the distribution... remember it’s called energy transfer partners but etp got merged into sxl numbers and dividends so despite etp an investor really needs to follow sunuco logistics numbers...
thorgood4 profile picture
why own it at all if it's such a concern? ETF's aren't exactly the solution..nor are they any safer than single stock selections..look at AMZA! you'd probably been better off with ETP! I am long MORL AMZA so I know their performance...falling knives anyone?
socalquest profile picture
SA REIT Guru, Brad Thomas, says WPG is sucker's yield. If I wanted to own WPG, I'd rather buy an ETF that owns it like KBWY. It's safer to own it via an ETF for diversification.
CincinnatiRick profile picture
Of course an ETF is safer because it gives you built-in diversification. But it also dilutes your ability to target any specific equity in which you might have confidence to give you an outsized return. Vanilla risk taking = vanilla returns.

I only use ETFs and CEFs to, in the interest of diversification, ensure participation in those market sectors where I have neither the time, access to information or interest to pursue specific equities in depth.
20$Bill profile picture
brad thomas self proclaimed guru says a lot of things. he has already called out one of rida's articles. seemed a little childish. but that's how brad self proclaimed guru rolls. the stocks brad recommends pay less then bonds. i have never bought a reit that he recommended. bought plenty rida has recommended including wpg.
StrattonOakmont profile picture
I've taken a lot of brad's advice. The tech reits grew over 60+% (averaged) while paying dividends of 5+%. 2017 was soft...for some medical and mall reits. Invest in the tech industrials and you will see great returns.

As much as I would love a 12-15% dividend...I am not willing to trade 20% value for it...
500MPH profile picture
I follow the Morningstar Dividend Newsletter. They have had ETP on their “Dividends in Peril” list for quite awhile. I’ve been meaning to ask them why. Do you have any insight on it?
He (Rida) does'nt have an insight on it. He may be encouraging others to buy ETP so that it goes up and he bails out.
sphereless profile picture
Kenyatta. What a horrible thing to suggest with out evidence. Have you no shame?
@ sphereless

He's just revealing the kind of person he is.
Recovery is coming for the best-in-class MLPs. Investor sentiment toward the midstream. space is to gloomy, valuations are far to low, and several volumetric growth stories remain intact. Selectivity will be critical to profiting from this opportunity. The correlation between MLPs and yields is moderately positive.Over time, underlying business fundamentals are a significantly greater driver of investor interest than is the interest rate environment.
WPG's CEO just bought almost $200k worth @ 6.49 on 2/28. Always nice to see insiders buying

D.Graves profile picture
I agree insider buying is definitely a good sign.
Rida Morwa profile picture
Hi WyzSki, thank you for sharing the insider buy.
Rida Morwa profile picture
Insider buying is very bullish for the stock
I have re entered ETP given its down in last 3weeks of 9.33%. This company is generating a lot of cash . Expect increases to happen. You didn’t mention tax benefits.
There are no tax benefits other than headache of filing of Schedule K.
Consists of typing out your brokers name and account number where everything is auto transferred.... Took almost a full minute.
Thank you for the deep dive. The details are appreciated!
Rida Morwa profile picture
Deep dive is good. WPG and ETP are opportunistic at the current price
222blue222 profile picture
I bought WPG a while back at $7 and CBL recently. I am sanguine!
This is a nice diversification from my momentum based trading systems. I will enjoy collecting the fat dividends and wait for the long term (even very long term) reward.
Jussi Askola, CFA profile picture
"long term" is key here! Best, Jussi
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