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AmeriGas Partners LP Message Board

  • robert_s_63134 robert_s_63134 Oct 14, 2005 3:54 PM Flag

    10 yr yield and APU

    There's no doubt that these MLPs get priced mostly in reference to the 10 yr. bond. However, even with yields moving into the mid 4s and perhaps on their way to 5, the expected yield on APU shares really shouldn't be as high as 8%. One has to consider that APU is a stronger company financially and competitively than it was 5 years ago when it used to trade between high teens and the 24 area. At that time, investors had more of a right to expect yields in excess of 10%. Now, APU is stronger financially, plus 2 to 2 and 1/2 points over the ten year should be sufficient. I think a fair price for this stock is 30 to 32. But we'll see what happens!

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