InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

$1,230 in Instant Income?

$1,230 in Instant Income?Our top income expert recently pulled the wraps off his breakthrough moneymaking technique. And he proved beyond a shadow of a doubt how you can use it to generate instant cash payouts of up to $1,230 (or more). Over and over again. But then he took things a big step further and guaranteed you can make $1 million by following his program. And the second he did, our phones went nuts! Space is limited — get the details here.

 

 

Most Loved Partnerships

By Robert Rapier on August 25, 2016

In the course of my research I regularly use custom stock screens to uncover overlooked companies. But this week I used a screen to review MLPs rated highly by analysts. This is an exercise I previously undertook back in April for energy corporations (see Uncovering the Little Darlings).

A consensus “Buy” rating isn’t necessarily a ticket to riches, as analysts are well-known for jumping on trailing-indicator bandwagons. Nevertheless, I like to periodically review highly rated stocks just to make sure I haven’t overlooked something. It is also interesting to compare and contrast what’s popular to what’s been working for our portfolios at MLP Profits.

For this screen I used my proprietary screening tool to extract data from the S&P Global Market Intelligence database. While the database tracks 68,924 energy companies around the world, I focused on the 100-plus publicly traded master limited partnerships.

I then narrowed the search by requiring research coverage by at least three analysts and an average recommendation of at least “Outperform,” or 2, on a scale that goes from 1 (“Buy”) to 5 (“Sell”). The screen identified 15 securities meeting these criteria. Most of them are conventional midstream MLPs, with a few exceptions:

160825TELlovedmlps

  • EV – Enterprise Value in millions of dollars as of Aug. 24
  • FCF – Free cash flow for the trailing 12 months (TTM)
  • Yld – Annualized yield based on the most recent distribution
  • YTD Ret – Total shareholder return (TSR), including dividends, in 2016

Landmark Infrastructure Partners (NASDAQ: LMRK), the company with the highest average rating by analysts, is an unconventional MLP that went public in late 2014. LMRK acquires, owns and manages a portfolio of real estate leased to companies in the wireless communication, outdoor advertising and renewable power generation industries. The current unit price is below the 2014 IPO price, but it has rallied thus far in 2016.

Two of the partnerships on the list, Buckeye Partners (NYSE: BPL) and Genesis Energy (NYSE: GEL) were highlighted in last week’s column as ones that don’t have to pay incentive distribution rights (IDRs).

Pattern Energy Group (NASDAQ: PEGI, TSE: PEG) is a dividend-paying “yieldco” focused on wind power. PEGI has a different corporate structure than conventional MLPs, and therefore the tax treatment of its distributions may vary.

Golar LNG Partners  (NASDAQ: GMLP) is a partnership organized and headquartered outside the U.S. that has has elected to be taxed as a corporation and will furnish 1099 tax forms rather than K-1s.  Some income will be treated as a dividend, and some as return of capital.    

Overall this group has a year-to-date total return of 18%. That’s better than the 13.6% for the Alerian MLP Index (AMZ) on a total return basis. The 6.6% average yield of this group slightly trails AMZ’s current 7.1%.

While we do have areas of agreement with the conventional wisdom in this table, we also think analysts got it wrong on some of the recommendations. In particular, we have been on record that the refinery space faces some near-term challenges, so we would avoid most refinery logistics MLPs like Valero Energy Partners (NYSE: VLP) and Tesoro Logistics (NYSE: TLLP), both of which are down for the year.

We have also cautioned against buying Shell Midstream Partners (NYSE: SHLX), the worst performer on the list, when we felt the price had raced ahead of fundamentals. The same goes for Cheniere Energy Partners (NYSE: CQP), which benefited from a lot of hype when liquefied natural gas exports from the Cheniere facility on the Gulf Coast started late last year. However, CQP has at least managed a positive YTD return.

By my count, about a third of the MLPs in the table appear in various portfolios at MLP Profits. For in-depth analysis of our outperforming Best Buy list, please consider subscribing.   

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)

 


You might also enjoy…

 

Obscure Tax Law Forces This Company to Pay Out 90% of its Profits

A 50-year-old loophole is forcing one company to pay out $9 of every $10 it makes from ironclad contracts with the U.S. Government.

In fact, over the past seven years, it’s made payments ranging from a few dollars… to tens of thousands of dollars… 30 times. Without a single cut! 

Most folks don’t even know this company exists, but the ones that do are making a mint.

Like Ted B., who’s set to receive a check for $1,096 just a few days from now.

Merrill H., a 58-year-old from New York, has collected over $3,385 so far. 

And retirees Beth and Terry P. have raked in $16,555.

I’ve put together a special report that will give you all the details, including simple instructions on how to get your name on the payout list before the next cutoff date.

You can get your copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.