Dividend growth of 12% - 13% per year plus the 9% plus dividend should drive, over time, a much better total return. Dividend growth drives total return. Do own MORL and recently bought BDCL. As a long time MLP investor I expect MLPL to outperform the others, including, CEFL easily. A look at historical returns of both the underlying indexes and the short history of these securities makes this quite obvious.
From Investor Village:
Atlas Energy LP (NYSE: ATLS) and Atlas Pipeline Partners L.P. (NYSE: APL) were recommended as shorts by Hedgeye, according to Bloomberg. Hedgeye said distributions were funded with capital raises and not "real profits" and this can't go on for too long. Hedgeye plans to publish a full report on April 24th.
Likely payout appears to be at least $5.60 for all of 2014. The underlying MLPs have an expected dividend growth rate of just a little less than 7% (at least according to ML reports). With a multiple of at least 1.7x the dividend should get there. And please realize this is back of the envelope and not meant to be exact.
So if I own a business and borrow money for a new building and the new building costs more than my business makes in a year, if I then go out to eat lunch at the local taco stand am I just eating up the borrowed money?
Taking a different tact. Bought at under 20, will collect the distribution and will wait on earnings as I believe coverage will be at least 1.1X or so (BOA/ML predicts 1.2X coverage). If coverage is as I expect their could be a rally into the 9% range (2.20/.09=24.44). However, as always, we figure out what we can to fill in the blanks but can't know if we are correct until after the fact.
Coverage ratio was less than 1 due to the timing of asset purchases. The costs were recognized while cash flow from the assets were not in the third quarter. Recognition of all cash flows should bring DCF coverage to well above 1 when first quarter numbers are reported.
With Fidelity I just have to acknowledge the risks. BOA/Merrill Lynch blocks the leveraged ETRACS. They tell me it is on an internal, non-public banned list.
Yes, spreads will, over time, increase as new, higher yielding securities replace owned lower yielding securities. However, book value can (and does) change quickly as rates change. A lower book value requires that the portfolio become smaller if leverage is maintained and to become much smaller if leverage is reduced. Hedging can help reduce the impact of higher treasury rates, but hedging cannot help if there is a simultaneous widening of mortgages versus treasuries (see Spring 2013). So in the near term one is left with a smaller portfolio of older, lower yielding securities and almost certainly a lower dividend. The impact of higher rates longer rates, even when short rates remain anchored, is almost certainly negative for MREITs in at least the short run.
ETE 88 MWE 80 PAA 60 MMP 62 GEL 55 EPD 72 EQM 66 TRGP 88 WES 64 MEMP 25 NGLS 57 BPL 75 ETP 61
Don't understand the extent of the weakness today except that buyers in the high 19's are taking a quick gain to start the new year. However, the next earnings report should be well received as assets purchased at the end of the third quarter should produce the DCF needed to push the distribution coverage to well above 1.3X at year-end. The .67X coverage reported at 3rd quarter was the result of the timing of the recognition of the costs of the new assets versus recognition of the cash from those assets - the assets settled at quarter-end.
Wondering why you believe the stock price will fall at X date the .8 cash amount. The new shares created will reduce book value as well.
Might as well inform. One sells the put for $2.70 and pockets that cash. If the puts are exercised the put seller must buy the units at 80. However, because the put seller has already pocketed the $2.70 the net cost of the units is only 77.30. So the dynamic is that the put seller either keeps the $2.70 if the option expires or is "forced" to purchase units $1.09 per share below the current price.
Could KMP units fall below the 77.30 price and make the trade net negative. Of course. However, given the recent price decline and with the X date looming next month the trade is likely a winner.
Appears to me it will drop the $2.35 per share. The book value of Nov 30 was stated to be prior to the payment of the announced dividend. So cash leaves the door at 80 cents per share and new shares are created without new cash to support book value. I own a large amount of WMC and am not sure what to think.
It certainly could become Lord of the GP's given the potential growth, but TRGP has already been really spectacular having raised its dividend approximately 35% in 2013 and having given guidance of an increase of greater than 25% for 2014. Own both.
The GP already existed as a private entity. Taking it public doesn't change the cash flow pattern. However, I can believe that some PAA holders are moving to the GP for the higher dividend growth rate. However, as some have pointed out on this message board, the IPO was at a rich level as compared to other public GPs such as TRGP, KMI and ETE.