As we explained in the Viewpoint Rising Income and in several subsequent alerts, most partnerships that announce secondary offerings suffer a short-term hit in the stock market because additional unit offerings dilute existing unitholders’ stake in the firm. Sure enough, Teekay’s units are trading roughly 5 to 6 percent lower today.

But over the longer term such offerings tend to be big positives for MLPs. In this case, Teekay has stated that it may re-borrow amounts that it’s paying down as part of this deal. This strongly suggests that Teekay LNG plans to acquire additional LNG carrier ships that will add to its cash flows and allow the firm to boost its distributions.

With capital markets opening up again, MLPs can borrow money and issue new shares to fund growth. Growing distributions drive performance for MLPs.

And don’t argue with history: Every single one of our recommended MLPs that’s announced a secondary offering of units this year is now trading higher than the day the deal was announced.

We recommend using the temporary dip in Teekay LNG Partners’ units to buy this Growth Portfolio bellwether.