【can rental loss offset w2 income】A New Look at Energy Infrastructure
Master limited partnerships (MLPs) were the business structure of choice for the energy infrastructure/midstream business in the decade through 2014; growth came from developing new projects,can rental loss offset w2 income funded with a combination of debt and equity, recalls sector expert
Tim Plaehn
, editor of
The Dividend Hunter
.
The energy sector crash blew up the MLP growth model and revealed some ugly features of the typical publicly traded partnership agreement.
The last four years have seen a massive restructuring of the companies operating in the energy midstream space. There are now a number of corporations instead of the partnership structure.
More from Tim Plaehn:
Top Picks 2019: Antero Midstream (AMGP)
Balance sheets have been strengthened with companies focusing on using internally generated cash flow to fund growth projects. Onerous features of MLP partnership agreements have been abandoned.
While share values have not recovered from the problems of recent years, the financial restructuring is basically completed, and these companies are on the verge of again generating attractive dividend growth and total returns for investors. Here are three stocks from the group that should do very well in 2019.
In 2014, Kinder Morgan Energy Partners was acquired by the corporate sponsor,
Kinder Morgan Energy Inc.
(
KMI
). The consolidation was not enough to prevent the carnage of the energy sector crash, as the share price fell from $43 to $12 in January 2016. It now trades at $17.40.
Over the last three years, the company reduced debt and built cash flow to internally fund growth projects. In April 2018 the dividend was increased by 60% to $0.20 per share.
See also:
Bakken to Permain: Elliott Gue's Top Plays for Energy Gains
Management has stated the dividend will increase by 25% each year in 2019 and 2020. Free cash flow is currently $2.00 per share and growing, so the $1.25 annual dividend for 2020 is in the bag. The stock currently yields 4.6%.
In mid-2015
Magellan Midstream Partners LP
(
MMP
) was an $83.50 per unit MLP. The units now trade for $62 and change. All of Magellan’s growth has been funded through internal cash generation, without the need to tap the equity markets.
Despite what the market price shows, the MMP distribution has been increased every quarter, and the current rate is up 42% compared to when it traded for $83. With a 6.25% yield and continued 8% annual distribution growth, MMP could return 20% or more in 2019.
Tallgrass Energy LP
(
TGE
) is the result of the 2018 merger of traditional MLP Tallgrass Energy Partners and the publicly traded general partner, Tallgrass Energy GP LP.
Story continues
Through its life as a traditional MLP, Tallgrass Energy Partners was one of the top distribution growth companies in the sector. The merger with the general partner eliminates the payments the MLP was paying to the GP. This means lower expenses and more cash to continue the distribution growth record.
Tallgrass owns and operates one of the largest crude oil and natural gas pipeline networks in the country. Dividends could grow at a mid-teens per year rate. With a current 8.6% yield, TGE is grossly undervalued and could double in 2019.
More From MoneyShow.com:
Darden: A Steady Eddie
JPMorgan Chase: Financial Powerhouse
Potash and Phosphates Create a Powerful Mosaic
Repsol: An O'Shaughnessy-Style Growth and Value Idea
View comments
下一篇:Considerable EBIT improvement in the first two months of 2020
相关文章:
- ESSA Bank & Trust Forms Relationship with Ameriprise Financial to Expand Financial Planning and Investment Services
- Inspire Medical Systems, Inc. to Host Earnings Call
- AGI or RGLD: Which Is the Better Value Stock Right Now?
- H2O Innovation Secures 7 New Projects, Totalling $7.6 M and Received Notice of Cancellation for One Project
- Vineyard Wind picks GE turbines for Massachusetts offshore wind farm
- U.S. CDC reports 1,827,425 coronavirus cases
- What's in Store for Ambarella (AMBA) This Earnings Season?
- Domino's Pizza (DPZ) is an Incredible Growth Stock: 3 Reasons Why
- Top Analyst Reports for Apple, Verizon & PayPal
- HAGENS BERMAN, NATIONAL TRIAL ATTORNEYS, Encourages Crown Castle (CCI) Investors Who Have Suffered Losses to Contact its Attorneys: Securities Fraud Case Filed
相关推荐:
- China Is Reopening Its Wet Markets. That's Good
- Three 3D-printed coronavirus-fighting products companies are making
- Ethereum decentralized exchange monthly volumes hit all-time-high
- EU open to compensating firms hit by coronavirus, more help for Italy
- Genco Shipping & Trading (GNK) Lags Q3 Earnings and Revenue Estimates
- UPDATE 1-MSCI to quadruple weighting of China A-shares in its global benchmarks
- A2Z Technologies Lists on Frankfurt Stock Exchange
- Global Automotive Plastics Markets, 2020-2027 - Focus on ABS, PP, PU, PVC, PE, PC, PMMA, PA & Others
- 35 Surprising Cities With Low Costs of Living
- Petrolympic Announces Closing of Private Placement
- SHAREHOLDER ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Spirit AeroSystems Holdings, Inc. - SPR
- IIOT-OXYS, Provides Business Update on COVID-19
- Why SkiStar AB (publ)'s (STO:SKIS B) High P/E Ratio Isn't Necessarily A Bad Thing
- Alaris Royalty Corp. to Host Earnings Call
- Unum (UNM) Q1 Earnings and Revenues Lag Estimates
- Global Automotive Plastics Markets, 2020-2027 - Focus on ABS, PP, PU, PVC, PE, PC, PMMA, PA & Others
- Vineyard Wind picks GE turbines for Massachusetts offshore wind farm
- Were Hedge Funds Right About Dumping Retail Value Inc. (RVI)?
- Global Automotive Plastics Markets, 2020-2027 - Focus on ABS, PP, PU, PVC, PE, PC, PMMA, PA & Others
- The New America High Income Fund, Inc. Declares Dividend