Thought I would go ahead and explain the equity cost of capital for XTEX and why it is not 14% like geoequities implied. XTEX/XTXI are indeed in the 50/50 splits, however, this does not mean that all cash is split 50/50, it means the accretive cash is split 50/50. For example, right now, XTEX is selling for roughly $34/unit. The distribution is $1.96, for a yield of roughly 5.75%. However, the true cost is higher as the GP take must be factored in. The current GP take, on a per unit basis, is roughly .60/unit. This means that the true yield (cost) is closer to 7.5%, far from 14%. Also keep in mind that while XTEX is in the 50/50 splits, it has one of the lowest yields of all of the MLP's, a feature that helps compensate for the fact that they are in the 50/50 splits.
Use a spreadsheet: (1) current GP take per LP unit = $.152. Add it to the $.49 and you get $.64, not $.60.
Note: GP "tax" is 31%.
(2) assume XTEX distribution grows to $.75/Q = $3 annual. At 7% yield, XTEX = $45/share. GP tax = 55%. Cost of equity = 10.33%.
If you doubt it, do the math.
Current low yield factors the next 2 year growth. I agreed that this is a given. But in 2-3 years with a cost of equity in the 10+% how will they be able to finance growth at the same rate? Hence the multiples will drop, hence higher cost of capital.
First of all, the GP take IS .60, that is on an annualized basis, which is indeed .15 on a quarterly basis.
Note: GP tax is NOT 31%, tell me again what your spreadsheet spits out when the GP gets .152 out of .64 total paid out. My trusty HP32SII tells me 23.7%, and what a surprise, but excel does the same. Must be a problem with your spreadsheet.
Also, you seem to worry about growth 2 or 3 years from now, why? Don't you think every MLP is going to be in the same boat? I suspect that we will see a wave of MLP mergers. The sector is becoming quite competitive. I suspect that we will see a lot more organic projects and perhaps cooperation between numerous MLP's to finance big projects (maybe the Alaskan Natural Gas pipeline with its 10+ billion dollar price tag ??). There are still many pipes owned by c-corps, private parties, E&P firms etc that can be put down into MLP's.