While I agree in general (and I personally am invested in the G&Ps and not the propane space myself), there is another point of view.
Assume NRGY can just maintain its current distribution, even if it doesn't increase it. You can get 12% yield on your cost basis. OK, your G&Ps are growing distributions at 8-15% but starting at a much lower level (albeit still attractive).
Consider a $ investment at this time in either NRGY or your G&Ps. In terms of total accumulated payouts it may be a decade or more until your G&Ps catch up with NRGY. Even after the yield on cost basis for the G&Ps catches up with the 12% for NRGY it will still be years more until they catch up with all the extra you could have received from NRGY in the meantime.
The key is whether NRGY at least maintains the current distribution. If it has to cut that analysis breaks down.
Bottom line: if you expect NRGY to at least maintain the current distribution it would be a very profitable investment at these levels, even though the G&P MLPs you suggest are clearly better businesses.
The real issue is that NRGY bought out the GP at a premium which reduced coverage ratio, then turned around and bought Tres Palacios at the top and it was also a very large deal, so it was a double whammy. They had low coverage due to the GP buyout, Tres was large and they overpaid and then the propane business started struggling more than was anticipated. All of that being said, they still are covering the distribution by about .8x-.9x.
They happen to own the absolute best Appalachian storage assets. The combination of Steuben, Stagecoach, Us Salt, Finger Lakes is hands down the envy of the midstream sector. It is in the right location and they are now somewhat integrated with each other.
Will those crown jewel assets, along with the proposed Marc I pipeline save the company. My feeling is that they will survive but unless Marc I is built within a year or two, they will not be able to maintain the distribution at this level and it will need to be cut by 10-20%.
Propane is struggling, but it is not dead.
The IPO of NRGY Midstream will likely breath some life into the company...