Entering text into the input field will update the search result below

A 10% Yield On Qualified Dividends, With Strong Coverage, Record Earnings, And No K-1


  • The yield is 10.54%, with strong 1.26X coverage.
  • Q4 '17 earnings hit records for revenue and adjusted EBITDA.
  • It issues a 1099 at tax time - no K-1.
  • It's only 3% above its 52-week low.

Looking for a high-yield investment without the hassle of a K-1?

KNOT Offshore Partners LP (NYSE:KNOP) is one of a few LPs that has elected to be treated as a C-Corp, and issues 1099s to unitholders at tax time. Thus, we are spared the complexities of a K-1.


KNOT Offshore Partners LP owns and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides crude oil loading, transportation, and storage services under time charters and bareboat charters. KNOT Offshore Partners GP LLC serves as the general partner of the company, and Knutsen NYK Offshore Tankers AS is its sponsor. The company was founded in 2013 and is headquartered in Aberdeen, UK. (Source: KNOP site)

Shuttle tankers are a niche industry - these specialized tankers comprise only around 1% of the world's conventional tanker fleet, and are a vital key solution for oil companies looking to monetize their product. Since many ports don't have the infrastructure to accommodate large tankers, producers charter shuttle tankers to get their oil into port. They also are used for transporting deep-sea oil to port. These are specialized vessels that take 2.5-3 years to build, which will cause a vessel shortage in this industry.


KNOP pays its distributions in the usual Feb-May-Aug-Nov. cycle for LPs, but there's a big difference at tax time: Unlike most LPs, it has elected to be treated as a C-Corporation for tax purposes, so investors receive the standard 1099 form and not a K-1 form.

Our High Dividend Stocks By Sector Tables track KNOP's price and current distribution yield (in the Services section).

Management has held the quarterly distribution steady, at $.52, since October 2015 - it's ~39% above its targeted minimum distribution of $.375.

Historically, KNOP has had good coverage, and 2017 was no exception. It

This article was written by

Double Dividend Stocks profile picture
Target 5-10% yields backed by solid earnings for better portfolio income.

Robert Hauver, MBA, was VP of Finance for an industry-leading corporation for 18 years, and publishes SA articles under the name DoubleDividendStocks. TipRanks rates DoubleDividendStocks in the Top 25 of all financial bloggers, and Seeking Alpha rates us in the Top 5 of several categories, including Dividend Ideas, Basic Materials, and Utilities. 

"Hidden Dividend Stocks Plus", a Seeking Alpha Marketplace service, which focuses on undercovered and undervalued income vehicles. HDS+ scours the world's markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

Analyst’s Disclosure: I am/we are long KNOP, GLOP, DLNG, GMLP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Long certain preferred units, vs. common units.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.