I respect the opinions that I read on this board and would appreciate any comments. I am planning to purchase the following MLPs: EPD, PAA, BPL, ETE, and KMP. I am planning to hold the MLPs for several years and live off the dividends. These MLPs have a history of increasing dividends and they seem to be safe and stable. Is 5 a sufficient number of MLPs or should I select 2 or 3 more? Any opinions about the quality of the 5 that I have selected would be appreciated? Thanks for your comments.
tip toe in, buy in three traunches. The stocks are right before ex distribution riht now and arevat very attractive prices. The pps are volatile for constant returns coupled with growth models.
KMP has sort of been trading down over a number of quarters and missed earnings be .13 per share last quarter, so tread carefully. the big volume leaders and market caps are kmp, epd, etp (ete is the parent) and line. there are others as everyone has a favorite mlp. be prepared for a variety of rumours around tax changes for mlps (which are benign). they can also suffer when dcf is constrained, as people worry about the distributions sustainability.
etp/ete just bought su, so its going to take awhile for resumption to its price range.
ifyou buy a little now, you will be pretty happy,but after ex distribution, the prices will drop quite a bit so buy more then. two or three buys will ensure you are at the lowest basis. the shares you buy now will fall after ex distribution, so buy more then.
i like line and epd. epd has no gp. lines gp is an llc. if you chart these all on one graph (see yahoo), you wil see line emerge as a winner. epd has done well too. finally, evep is the hot one now, but you should buy some.
i dont care about portfolio cocentration, because i trade and never hold, but those who are suggesting 10% are a bit conservative. verizon and vodafone are less exciting but pay well to. be careful and go slow.
the market is tough right now, so dont expect a lot.
my personsl favorites are
<i like line and epd. epd has no gp. lines gp is an llc. if you chart these all on one graph (see yahoo), you wil see line emerge as a winner.>
On the LINE board there has been a discussion re: the performance of LINE this year. Not that great, and matches EPD step for step, with the only returns being the distributions:
When you put those two against EVEP (which you mentioned), MarkWest (MWE) and Williams Partners (WPZ), it is a different story.
Williams has a history of raising distributions every year by 6-10% also (and is up over $2 as I post this).
Don't get too caught up in LINE - it's hedging strategy has locked in profits, but also locked out appreciation.
Thanks for the excellent overview and analysis as always Ben. I'm into EPD again and watching SDRL as well with the intent to buy 1000 sh on any dip as a start. I like the fundamentals on that (though it's not a MLP). Remember in my e-mail when I mentioned EEP? It's doing well since then - did you look into it? What do you think of it?
IMO you have picked some good,solid MLPs to sit on. I own units in a couple of yours,too. My six largest MLP positions are grouped three in crude oil storage and transportation and three in Natural Gas Liquids(NGLs) gathering and processing. On the crude oil side are PAA,MMP,and SXL. The NGL Trio include MWE,EPD,and APL. MMP and SXL also transport refined products. PAA is building a position in natural gas storage,too. All are increasing distributions these days, and my wife is getting a new Lexus this Christmas..
Good question, but would suggest the forum has gotten you some interesting and incorrect responses.
One cannot suggest ANY MLP or stock for thast matter w/o knowing a significant amount of info about your personal situation. This would definately not be the place to do that.
I would suggest going to Investor Village and learning there. You need to be a member and the comments are more on line.
FWIW, I am retired but do not need the distributions to live on. Have owned most of my positions for 5+ years. My holdings include MWE, EPD, APL, MMP, PAA, SXL, ETE.
Definately agree thqt MLPs should not bemore than 20% of holdings and 5% max in any one MLP.
Not disputing the wisdom of the basket of eggs, however, we are an oil driven economy. Acknowledging the "green power" movement that we are a ways away from it being a factor in
affecting our dependency on fossil fuel. What are the alternatives to the oil and gas pipeline industry? Until there are viable alternatives to this sector, discounting all of the known risk factors, I maintain a heavy egg count in the sector. Any feed back appreciated.