Demming said what I've said here several times in recent months. MMP's strong performance relative to their peers is no accident. The whole MLP group has been a disaster of late, but MMP less so. Oil may stay weak for several more years before it turns around. The weakness has been artificially created by the Saudis in an attempt to destroy their competition. It's like when a company like Walmart moves into town, destroys all the mom-and-pop competition, and then raises prices as much as they want. The Saudi royal family better be careful that they don't cause so much pain for their own citizens that they create a huge backlash out to overthrow them. In the meanwhile, investors should stick with only the strongest of the MLPs to put their money in. The entire sector is in a precarious situation, and only the strongest will survive. MMP and EPD are the only two I would consider owning. As Demming says, the lower yield gives some solace that there's financial strength that justifies that lower yield.
MMP was a screaming buy, and I was screaming BUY when it was in the 55-56 range. The only way to buy this thing is to pick your price and have an open order in place. Trading is thin, so you stand a chance even with a ridiculose price. Put in an order at $55.83 and forget about it. You never know.
EPD gives a 5% discount if you participate in the DRIP through either the transfer agent or a participating brokerage. TDAmeritrade, Fidelity, Schwab, and others. This from the company website: "You may purchase our common units at a discount ranging from 0% to 5% (currently set at 5%) without paying any service fees, brokerage trading fees or other charges. (Note: If you participate in the Plan through your broker, you should consult with your broker; your broker may charge you a service fee.)"
Good observation. After the upcoming DRIP on EPD, I'm going to discontinue my participation. Even with the 5% discount, it no longer seems to make sense to stay with the program. I'll use the DRS (Direct Registration Service) to move my units back to my regular brokerage account from Wells Fargo. That's to get all my assets under one roof to simplify my estate liquidation after I die.
DO NOT fly on Daallo Airlines!
MMP staged a spectacular recovery after getting hammered in the morning, closing down just a nickel on a day when the overall market got trounced. Again, as has happened so often lately, MMP was significantly stronger than EPD. They're both good, but MMP is far better, IMO. I'm betting that MMP will outpace EPD by a country mile when oil and the MLP sector finally turn around. I'd stay far, far away from all the others, and owning the ETFs is really playing with fire. The more oil goes down, the more it will eventually spring back. Enjoy the cheap gas and heating oil prices; they won't last forever.
From a tax standpoint, it makes no sense to "harvest" the distribution in individual accounts, but it does in IRA accounts. Since the vast majority of MLPs are held in individual accounts, it seems unlikely that there will be a wave of selling following the ex-distribution date. This quarterly anomaly all gets baked into the cake, so it's not worth trying to guess what the near-term effect will be. Just buy the dips, and let the rest take care of itself. The next distribution in 3 months will almost certainly be over 80¢ and possibly as much as about 81¢.
Just read that OPK fell by 20% in January. They're working to get their act together and make February even better. As the price goes lower, it becomes easier to increase the month over month percentage decline. It won't take much to trim 25% to 30% off the price, especially if the overall market keeps tanking.
Pipelines that have adequate coverage are still increasing their distributions. Those that are struggling are trying to hold the line, but the responsible thing to do would be to reduce distributions to no more than 90% of distributible cash flow. EPD is in reasonably good financial shape with a distribution coverage of about 1.3X. MMP is even stronger, and the unit price shows it. Those are the ONLY MLPs I'd go anywhere near. I wouldn't touch any of the others with a 10 foot pole.
I use Firefox with Yahoo. It's usually pretty fast, but not always. Sometimes it's inaccessible, but that's a problem with Yahoo, not Firefox. Yahoo is totally unresponsive to errors in their reporting, and they don't care. They still show EPD splitting twice in two days in 2014. They're in trouble, and there are many good reasons for that.
MMP is stuck in a classic tug of war between the recent highs of ~$70 and the lows of ~$55. I expect the support at ~$55 to hold, but I won't be surprised to see the high of $70 taken out. Looks like resistance in the mid- 70s, but I prefer that to $65.
Most people who buy MLPs don't really understand what they're buying. The tax laws are complicated and simple at the same time. Therefore, the disagreement over whether to own them in IRAs as opposed to personal accounts. I have repeatedly and strongly advised on this board that people have a serious conversation with their tax professionals before buying any MLPs.
The sensible thing for CAT to do is to cut the dividend to conserve cash if earnings are bad. I'd view it as a long-term positive for the future of the company. This is a highly cyclical industry, and periods of slow demand are to be expected. CAT is still the dominant player in the sand-box, and they'll be the first to recover when commodities show signs of stabilizing.
Keep in mind that this is an investment that should NEVER be sold by the original buyer. In order to get the tax benefit, investors should wait until AFTER they die to sell. Selling before you die negates the benefit. On the other hand, heirs should sell immediately after the death of the decedent. Talk to your tax professional for more information.
Sorry. I was off by half a cent in my prediction of the next distribution. I'll try to get it right next time. $0.785 cents is the official quarterly distribution, payable on February 12, 2016, to unitholders of record on February 5, 2016, with an ex-dividend date of February 3, 2016. That's a 3% increase from the previous quarter and brings the current yield to around 5%.
The theory is that employee loyalty can be bought with good wages and benefits. One thing that TCS did was to let employees participate in the IPO. That got them all excited, at least until the stock took a dive. Now it's working against the company in a very big way. Employee stock ownership is a double-edged sword. It worked very well for AAPL; not so much for TCS.