ya, well I caught up on the Boardwalk deal. That's too bad for sure. And I am not denying the potholes we can step in... but Linn has unfairly paid its dues, and thusly should not be mentioned in the same breath as Boardwalk. I really can't wait for the earnings report. Some oils have gone down on earnings and some have hit 52 week highs. I fully expect very good news on the 27th. I will be on that conference call. This IS a good time to pick up more shares (again), and great timing for the div on Friday for reinvestment.
Boardwalk Partners (BWP) units traded down 46% in one day after the company announced net income declined 78% and dividend distributions were dropped more than 80%. With a market cap after the share price crash of ~$3.2 billion, unitholders lost ~$3 billion today in aggregate.
This is a stunning reminder to MLP investors that equity in MLPs is not necessarily "safe." Dividends are not necessarily "secure." Despite a long track record of raising dividend levels and consistently paying dividends, Boardwalk's underlying business shifted, leading to an inability to sustain dividends and a necessity to shift cash flow to paying down debt.
I mentioned this risk in this article where I mentioned that, despite its large size and strong dividend history, dividend paying MLP Linn Energy (LINE) (LNCO) was more risky than the market had been pricing in, and had subsequently underperformed a smaller, less liquid, but more secure convertible preferred that paid a higher dividend. Obviously LINE has substantially outperformed BWP subsequent to the precipitous drop in BWP unit prices, so perhaps my focus should have been on BWP and other pipeline MLPs. And LINE has successfully completed its merger with Berry Petroleum, shoring up its cash flow and proved reserves relative to debt levels.
Seeking Alpha article that described what happened at Boardwalk Partners then mentioned LINE and LNCO were likely out of the woods of same problem of over dividending... You had to read it 3 times to get the 'positive' feel for LNCO - careless writing...