VERY POSITIVE STATEMENT
Company said that it will consider increasing the dividend growth rate above the 5% level later this year. Given the stong coverage ratios currently (1.5x in Q4) and large organic growth projects coming on stream it could easily increase the growth rate to 8-10%.
Take a look at those that are increasing their distribution rates the fastest and balance that with both distribution coverage and where they function.
For example midstream MLPs generally trade at a lower rate for distributions than E&Ps because of less risk. But midstream is likely to have a bit lower DCF in 2012 because the VERY high spreads in 2011 are not likely to be repeated according to several of the midstream companies. You then need to consider how long interest rates will remain low because that will hurt MLPs when it happens for those MLPs that have a distribution CAGR less than the increase in interest rates.
FWIW, I do not every post what I like. I do share what I bought. I bought into RNO when it got under 18. Also EPB about 32 on the scare of no dropdowns. Added to ETP on valuation in November. Ditto for EVEP and LINE. Reinvesting ETP, OKS, EPD, ETP, MWE. I do not plan to add any MLPs AT CURRENT PRICE LEVELS because I am over invested and also I tend to buy on bad news. I do not buy into the new IPOs, but wait for a quarter of two or ten to see what they do.
Also remember my average holding in MLPs is approaching 7 years. I am a holder, not a trader.
I also always speak with management. Crazy if you don't and get a feel of a company. If someone other than a secretary will not speak with you, invest elsewhere!
The coverage ratio for Q4 was actually 2.7X including the asset sales. This suggests the K-1s are going to contain some significant changes. In the past unit holders got a K-1 with passive losses forward, but this year most should see either a neutral number in box #1 or a positive number. With profits at the current level the tax deferral portion of the distribution is declining.
EPD could increase the distribution by about 50% in total and still continue to fund projects and improve its bond rating. Analyists have been split on its plans with about 1/2 showing a .01 increase for 2102 per quarter and several suggesting an increase of .01 for Q1 and .015 in the latter 1/2 of the year.
This is the first MLP to report. Their accountants must have been really busy. It also gives a good picture of what to expect from the other midstream MLPs. High oil and cheap gas is the perfect environment.
Just sold 2/3 of EPD position as the price is out of line with distribution. For 3 years they have raised distribution .007 or .008 each quarter. They talk about raising it second half of year. Why not next 2 quarters. KMP gives 1 years guidance-NGLS and WPZ gives % guidance for year. I think I will wait for guidance or pull back to re-enter
I don't think the unit price will grow without an increase... I have never seen an MLP dip below a 5% yeild
The results are so good and they are so smart that they may have outsmarted themselves
No planned equity raises. that should help us finish digesting DEP and EPE.
Still have a small amount of ETE to sell to fund CAPEX
I'd much rather have our problem of a bit less tax deferral, than KMP or ETP's problem of no distribution growth and low coverage.
MWE and NGLS seem to be in the sweet spot as well. Both conservative companies raising guidance and expectations.
I know that as a MLP it does distrubute funds, but what would
you call it for the sake of the descussion?
My apologies if I mispelled :-) any words My spellchecker doesn't work, it gives the message will not work in the language selected so if swalihi was what I had typed in; I guess all words would be correct. product of public schools of the 50's & 60's