Oil and Gas Pipeline Picks
We looked at exploration and production companies and oil service companies too. Can’t leave out the oil and gas pipeline stocks! These are yet another great way to expand your portfolio within the energy industry. Some of these are relatively new to TKO and may be new to you. However, Jared Cummans assures these picks are great because of the high yields.
Whiting USA Trust One (WHX) – Dividend yield of 17.1%
Whiting USA Trust is a royalty of Whiting Petroleum Corporation (WLL) and was founded in 2007. The subsidiary represents the right to receive 90% of the net proceeds from Whiting’s interests in oil and natural gasproducing pipelines, the majority of which lie in the Rocky Mountain and Gulf Coast regions of the US. The company then passes on distributions to its shareholders, allowing it to pay out a robust yield. But investors should be wary that while this stock is paying out a dividend of 17%, its 19% losses on the year may be of some major concern to those who are unsure of how this stock will fair in our current environment.
Energy Transfer Partners L.P. (ETP) – Dividend Yield of 8.2%
ETP is a master limited partnership (MLP) and derives its business primarily from the infrastructure and transportation of natural gas. The company has pipelines all over the country, including Arizona and Colorado, on top of owning the largest intrastate pipeline in Texas. The MLP is one of the largest propane retailers in the U.S. as well as owning a fair amount of liquid natural gas storage and transportation assets. The stock price for ETP is no stranger to big swings, but for those willing to stomach the volatility, the 8% dividend yield will surely add a nice income stream to your portfolio.
Boardwalk Pipeline Partners, LP (BWP) – Dividend Yield of 7.9%
Another MLP, Boardwalk is primarily engaged in the transportation and storage of liquid natural gas. In fact, in 2010 their systems carried approximately 10% of the nation’s average daily consumption of natural gas, making them a major player in the oil & gas pipeline sector. The company has over 14,000 miles of pipeline through out 12 states, as well as three subsidiaries to keep operations focused in different regions across the US. BWP is one of the larger companies on this list, as their market cap comes in at just over $5 billion with a P/E ratio of nearly 23. But while the 7.9% yield seems like an attractive option, investors should consider that BWP’s current quarterly earnings growth (yoy) is -72%, painting a hazy future for this stock in the near term. You can also get NatGas exposure.
Enbridge Energy Partners LP (EEP) – Dividend Yield of 7.7%
Right off the bat, investors will notice that EEP is a relatively popular stock, as it changes hands over 630,000 times daily with a market cap nearing $7 billion. The company has a more broad based business model that transports crude as well as natural gas. EEP split its shares in April of this year, and has been a relatively strong performer over the trailing 52-weeks, while other stocks on this list cannot say the same. Investors should note that the EPS of this stock is -1 for the time being, so while it may have strong growth prospects, it is currently operating in the red.
DCP Midstream Partners LP (DPM) – Dividend Yield of 6.5%
The final company on this list is another MLP with an attractive yield. DCP Midstream is headquartered in Denver and “leads the midstream segment as the second-largest natural gas gatherer and processor, is the largest natural gas liquids producer, and is one of the largest marketers of natural gas and natural gas by-products in the United States”. Another noteworthy characteristic is that DCP is a 50/50 joint venture between Spectra Energy (SE) and the massive ConocoPhillips (COP). DPM’s P/E ratio of 137.5 suggests that they don’t have much in the way of earnings but their stock has performed well in the last year, which may make it a good candidate for an income addition to an investment portfolio.
High yielding stocks can be hard to come by. This can especially be true within the oil and gas industry and the commodities market. With the tumultuous market we are currently seeing, high yield stocks can be a great choice.
Quotes taken from report by Jared Cummans, Read the entire article here.
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