I would appreciate your oppinion, and others, regarding SE V's SEP.
SEP pays a higher dividend at 5% and SEP stock price seems to be climbing
faster also, although SEP may be a bit overbought here.
The talk of insider buying at SEP probably helped its stock price.
But if insiders are buying SEP instead of SE, whats the significance of that?
Thanks for all replys.
The insider buying is quite small. I looked at the list and the directors and officers do not own that much. I doubt that they would, because as an MLP they need to pay tax on the distributions at their tax rate which could be as high as 39%.
SE would not buy shares. The reason they set up the MLP in the first place was to drop down low return businesses so that they could take the proceeds and invest in higher return assets. By doing this they can expand without incurring debt or issuing more shares.
MLP's make a lot of sense for folks looking for yeild that can stay in the 15% Tax bracket. I think for a married couple it goes up to around 70K after all deductions taken. So if you have mortgage, state income & local property tax plus donations and personal exemptions you could gross around $100K with these distributions included and stay in the 15% bracket. Retirees also buy them. Some of the distribution may also be a return on capital, so you do not pay tax on that, but must reduce your cost basis by that amount. After owning the stock a long time your cost basis could go down to a low level; however, when you sell the stock the gains are at long term rates. You really need to look at the tax consequences based on your individual situation before deciding to buy an MLP.
Actually NG is back down to $3.15. That is not the reason to buy SE. Se is rapidly expanding into liquids and into liquids midstream. They just made a deaL to buy the Express-Platte which is a 1700 mile system for oil between Canada and the US. Go to their presentations on the web site and look at all the capital they are spending at SE, SEP and with PSX in the DCP partnership. All these vehicles have great cash flow and SE is putting it to work building a pipeline and midstream empire. I love companies that generate cash in growing businesses that reinvest, yet return lots to shareholders in dividends and buy backs.
I am long this stock and have owned it since it started in '07. But for Pete's sake, it has gone NOWHERE in all that time. It is a good company in a hopefully very good business and I have no intention of selling but as far as investments go it has been one of my poorest. I do reinvest my dividends as well. Also it's payout ratio is 80% so any dividend increases will probably be puny unless nat gas really comes into it's own...and that is what I am hoping for. I want to but I just can't rate it a buy right now.
norbert - I First bought 200 shares in "07" - added at times, I have added 100 here at $26.90 ( + $2.00 transaction cost = $2692.00 ) now have 1600 - think it is a Good stock to own - I don't trade it !...by subtracting dividends - my cost is now $20.23 which gives a 6% dividend on invested money !...if nat. gas is the future, we are in a good stock.....PEACE !
Agree. The fact that they have the MLP to use for drop downs and the DCP operation with PSX makes SE a very nice business. PSX is a very strong company and a great partner, making SE even stronger.
I just transferred some shares to my grandchildren and plan on adding to their accounts every year.