If you like big-yield income, you’ve likely come across the oil & gas midstream industry. The group can offer impressive high income, plus total returns that are less correlated with the overall stock market (because of the steady fee-based income these companies generate). But there are a few things you need to consider before investing. In this brief report, we share comparative data on the 12 biggest companies in the group, plus a few important caveats on investing in them.
New Options Trade: Dividend Capture Covered Calls, Energy Midstream
Today’s income-generating options trade utilizes a dividend capture covered call strategy, whereby the trades nets you attractive premium income, potentially attractive dividend income (if the shares don’t get called), and captures attractive share price gains (if the shares do get called). The trade is on a compelling “high-dividend” midstream company that we own already, but you can also purchase the shares as part of this trade if you don’t own them already. We believe the trade is attractive to place today, and potentially over the next few days, as long as the share price doesn’t move too dramatically, and as long as you own the shares (settled in your account) prior to the ex-dividend date (expected on or around July 29th).
New Options Trade: Energy Sector, Yield Boosting
If you are an income-focused investor, you may want to consider the yield boosting options trade in this report. It’s a strategy that some investors repeat often, and in this particular instance we are focused on a high-income energy-sector investment that offers a 7.5% yield (paid quarterly), and this trade adds significantly to that amount. We believe this is an attractive trade to place today, and potentially over the next few trading sessions, as long as the price of the underlying security doesn’t move too dramatically before then.
8.3% Yield: Attractively Priced Top-Tier Midstream Play
If you are looking for big safe income, this midstream operator is attractive. It operates as a Master Limited Partnership (MLP), and has consistently maintained its distribution throughout the pandemic (while other midstream MLPs were cutting). Further, it’s actually increased the distribution 22 years in a row, and insiders have a large stake in the company. This article reviews the health of the business, distribution safety, valuation, risks and concludes with our opinion on investing.
Enterprise Products Partners: Best In Class Midstream, Compelling 6.9% Yield, Still No K-1 to C-Corp
Enterprise Products Partners L.P. is an American oil and natural gas midstream service provider with its headquarters in Houston, Texas. In this report, we analyze the company’s business model, income, growth, distribution prospects and finally conclude with our opinion on whether EPD offers an attractive balance between risks and rewards.