Fear in the energy sector is high (cheap oil has already bankrupted more than 50 American Producers), and declining prices have created some very interesting opportunities. For example, Master Limited Partnerships (MLPs) are still 45% off their highs (as measured by the Alerian MLP index), and they're offering big yields. For your consideration, we’ve highlighted (below) three high yielding MLPs that we believe are trading at attractive prices.
3) Enterprise Products Partners (5.8% Yield)
This is not the first time we’ve mentioned Enterprise Product Partners (EPD), and we believe it continues to offer a very attractive yield and price appreciation potential. Its financial strength and continued access to capital set it apart, and it should not have sold off with other MLPs as much as it did. You can read our full EPD report here.
2) Plains All American Pipeline (11.4% Yield)
Plains All American Pipeline (PAA) sold off with other MLPs, and the market is not giving it enough credit for its high level of energy price agnostic fee business, the credit worthiness of its counterparties, and the fact that it’s currently well capitalized. We believe it has significant price appreciation potential, and it will continue to pay attractive distributions. You can read our full Plains report here.
1) Natural Gas and Olefin MLP (~12% Yield)
Our number one high yield MLP worth considering is a natural gas and olefin player that has declined more than 50%, and pays monthly distributions that amount to a nearly 12% annual yield. It trades for less than its book value, and a basic distribution discount model suggests the market has already priced in an unrealistic amount of fear. This MLP deserves a lot more credit for its unique operations, the value of its assets, and its potential for future growth.
We’ve reserved our detailed report on this one for members only, and it can be accessed in this week’s Blue Harbinger Weekly. If you are not already a member, consider a subscription.