I have held KMR for years, it is a LLC like LNCO. KMP unitholders swear by KMP; KMR shareholders swear by KMR. KMP issues K-1's at tax time and KMR issues nothing. KMR is simpler re taxes.
KMP prices at a premium to KMR, or KMR is discounted to KMP depending on your view. That spread has widened and narrowed many, many times over the years. Discussion about it is evergoing with no conclusive reason or rationale.
I suppose it boils down to the Vanilla or Chocolate argument.
I realize LNCO sends 1099 's for taxable accounts but shareholders are aware of that at buy so I doubt that weighs heavy on the spread. The discount caused by the difference equates to a slightly higher yield.
Therefore an inducement.
That is a similar distribution to the common issue but without the level of risk!
The preferreds provide the capital for the leverage applied to the common issue.
Please excuse me for distracting anyone from the stimulating, well reasoned political arguments below with boring investment discussion. But I wanted to share some information with anyone who might still happen by this board, despite its current usage.
GAB-H is a AAA rated (S&P) preferred with a coupon of 5% and an x-div date of Dec 16 or so. Currently it is priced at $21.19 and has a call date of 9/28/17 (15 dividends remaining) with an annual div of $1.25/ .3125 p/qtr. That is $4.69 in dividend and with a discount to par of $3.81 totals $8.50 return at maturity for an investment of $21.20 in 3.75 years. That is a 40% return or 10.6% annualized.
These preferreds have been knocked down with the Taper scares of the recent months, which leaves a discounted price opportunity yielding a 6% dividend and $3.50+ in price ($25 at call). I don't expect Treasury rates to rise to near these levels in that time frame, however if they do it will be so close to maturity as to restore the par value, perhaps even a premium to it.
I am a buyer here. GLTA
Please resume the stirring discussion of national politics.
I don't understand how or when EEP gets compensated for contributing assets to the venture.
Not much information available which is unsettling.
I hold EEQ which I believe holds 19% of EEP.
In other words, what do I get in exchange for giving the assets to MEP?
Why was this never explained?
Once the IPO is complete, does EEP get the cash raised for the assets contributed?
Communication very poor here, or did I miss something?
Any help appreciated.
These are rather young issues relative to maturity (call date). The low prices are an opportunity. They all start out at $25. If you buy for less (discount) you will get the discount back at maturity plus all the dividends promised. More mature preferreds tend to have less of a discount because they will hit the call and the $25 investment will be returned. More buyers have settled in awaiting the call.
Read my two posts NNN-PD & NNN-PE, do the math, the E issue is a bargain that will return well for 5 years. I sold the common and bought the E preferred.
I already have some of the D and I am just collecting the div's until call. D was selling at a premium before the Taper scare. Always buy at a discount, can't get hurt unless bankruptcy. Doubt that will happen w/ NNN.
Sentiment: Strong Buy
Oil & Gas run thru the pipes 24 hrs/day,365 days/yr.
KMR is a dividend machine with sound capital returns.
Probably some subsidiary type company. ACF was symbol for American Car & Foundry of Berwick, PA.
They go back to 1906. ARII is the current form of that company. I am assuming the new ACF has a strong kinship to ARII and they are reigniting some assets to work off backlog. Just a hunch.
NNN cannot call until call date but may not callat that time and will continue paying dividends until they call. They will pay your $25 back when called. Usually, these preferreds get closer to par as they get closer to call date (maturity). NNN-PD and NNN-PE are fairly recent issues.
NNN-PE is a strong buy. These preferreds got beaten up with the taper scare as did NNN.
Sentiment: Strong Buy
Preferred w/coupon of 6.625%. Baa3 Rating. Call date 2/23/17. Pays $1.656 per annum.
At today's price of $23 = 7.2% yield. If held to call, $5.80 div + $2 current discount to par = $7.80 total return.
31% return over 4.5 years = 6.8% annualized.
NNN-PE is a better return.
This Preferred at today's price of 19.80 yields 7.2% or $1.425 per annum. Coupon of 5.70%. Callable date is 5/30/18. rated Baa3. If held to call, $7.125 total div. Add $5 for current discount to par = $12.12 return on a $20 investment.
Or 60% return over 5 years = 12% annualized on a preferred. That's a buy for me.
Sentiment: Strong Buy
Forbes article today saye price of SPO was $29.
Perhaps, if EEQ made an announcement it would not have sold off so strongly.
Communication to investors could be better.