Key analysis: The most important trends in propane right now (Part 6 of 7)
Below are key statistics for the three major propane distributors (as of February 19, 2014).
Note that AmeriGas (APU), Ferrellgas (FGP), and Suburban Propane (SPH) are all part of a class of equities called “master limited partnerships” or “MLPs.” For more on MLPs, please refer to The Market Realist guide to master limited partnerships.
Many investors buy MLP names because they pay out a significant amount of the cash flow they generate as distributions (like a dividend), so investors buy MLPs for the current income that’s generated. APU, FGP, and SPH all currently pay out around an 8% distribution yield.
To read about how investing in propane distributors compares to investing in MLP ETFs and high yield bond ETFs, please continue on to the next part of this series.
Browse this series on Market Realist:
- Part 1 - Must-know: Cold weather keeps spurring strong propane demand
- Part 2 - Why more exports and crop drying mean higher propane demand
- Part 3 - Why depleted propane inventories mean price spikes and volatility
- Commodity Markets
- master limited partnerships